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Corporate Directory
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GME Resources Ltd
ABN 62 009 260 315
Directors
Share Registry
Michael Delaney PERROTT AM B.Com, Chairman
James Noel SULLIVAN FAICD, Managing Director
Peter Ross SULLIVAN BE, MBA, Director
Computershare Registry Services Pty Ltd
Level 2, Reserve Bank Building
45 St George’s Terrace
Perth WA 6000
GPO Box D182
Perth WA 6001
Telephone: (08) 9323 2000
Facsimile: (08) 9323 2033
Company Secretary
Mark Pitts B.Bus FCA
Registered Office and
Principal Place of Business
247 Balcatta Rd
Balcatta WA 6021
Telephone: (08) 6180 4690
Facsimile: (08) 9315 5475
Web Site: www.gmeresources.com.au
Auditors
HLB Mann Judd
Chartered Accountants
Level 4, 130 Stirling Street
Perth WA 6000
Table of Contents
Chairman’s Letter
1
Operations Report 2013
2
Corporate Governance
25-30
Directors’ Report
32-37
Auditor’s Independence Declaration
38
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
39
Consolidated Statement of Financial Position
40
Consolidated Statement of Changes In Equity
41
Consolidated Statement of Cash Flows
42
Notes to the Financial Statements
43-59
Directors’ Declaration
60
Independent Auditor’s Report
61-62
Shareholder Information
63
GME Resources Ltd - Annual Report 2014
Securities Exchange Listing
The Company’s shares are quoted on the Official List of
Australian Securities Exchange Limited Ticker code: GME
State of Registration
Western Australia
Chairman’s Letter
For personal use only
Dear Shareholder
Good progress continues to be made in your company and your Directors remain confident of the value of the assets
within the company.
There were several highlights through the year which warrant your attention. In particular, the results from the scoping
study which was announced in December provided further encouragement and confidence that the Company is on the
correct pathway in relation to the future development of the NiWest Nickel Project.
The extensive test program to be completed this year is expected to deliver further traction and provide a much
improved understanding as to the likely successful outcome of a heap leach operation, which will utilise Direct Solvent
Extraction. More work continues to be done on this, as is described in our Annual Report, but your Directors are
encouraged by progress being made.
Although the gold assets are not the principle focus of our attention, we have been successful in further upgrading of
these assets and will continue with the Company’s strategy to unlock the value of these projects where small scale high
profit operations can be sustained.
Funding for the company continues with a successful capital raising in June, which received strong support from our
shareholders. In particular we welcome Panoramic Resources Ltd, a leading West Australia nickel producer to our
register who has taken up the substantial proportion of the short fall from the entitlements issue.
Once again I would like to thank my fellow Board members for their strong and active involvement, especially our
Managing Director, Jamie Sullivan. It is a small but active Board and we are able to work closely together.
Our Annual General Meeting is at our usual venue in Applecross and we look forward to seeing you there.
Yours faithfully
Michael Perrott AM
Chairman
Page 1 - GME Resources Ltd - Annual Report 2014
Operations Report 2014
The next twelve months are shaping up as a defining period for the
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NiWest Project. Results from the metallurgical test program that is in
progress has the potential to significantly enhance the Company’s
development strategy to transform the NiWest Nickel Project into long
term nickel operation. The Company looks forward to providing updates
on its activities throughout the year.
NiWest Nickel Laterite Project: (GME - 100%)
Project Overview
GME’s NiWest Nickel Laterite Project in the North Eastern Goldfields of Western Australia is located in the centre of one
of the world’s premier nickel producing provinces. Important open access infrastructure such as rail line, gas pipe line
and arterial roads traverse or are in close proximity to the project area.
The project hosts a significant drill tested resource that boasts a nickel inventory of over 1,000,000 tonnes of contained
nickel metal. With the all of the resources located between surface and fifty metres depth, the project presents the
opportunity to exploit the deposits through conventional low cost open pit mining.
Extensive testing of the different ore types that comprise the NiWest resources strongly indicate that they are amenable
to processing by Heap Leaching (HL). The location of the project within predominately flat terrain and semi desert
environment offers ideal conditions for the development of a heap leach operation. Technology around heap leaching of
minerals and metals is well established and has been used for decades in the copper and gold industries.
Results from numerous column leach tests completed have consistently demonstrated that nickel extraction rates above
70% are achievable. Adding further support to the heap leaching processing option is the successful heap leach program
completed on similar lateritic ore types at the adjacent Murrin Murrin Nickel Refinery.
The key to unlocking the underlying value of the NiWest resource rests with two factors; firstly, to develop a process
flow sheet that maximises the value of the metal recovered from the nickel solutions coming from the heap leach; and
secondly to design a processing facility at a significantly lower capital cost than the more complex multi-billion dollar
high pressure acid leach plants such as Ravensthorpe and Murrin Murrin.
The initial “Proof of Concept” metallurgical test program on downstream processing of pregnant nickel solutions utilising
Direct Solvent Extraction (DSX) techniques was successfully completed in 2013. The positive result from this test work
was instrumental in providing the Company with the catalyst to advance the NiWest development strategy.
In August last year, the Company engaged Bateman Tenova and MWorx Pty Ltd to complete a Scoping Study utilising the
HL-DSX-EW flow sheet in an effort to gauge the technical and economic viability for a operation of this nature.
Bateman Tenova is an internationally recognised engineering firm with extensive experience in the design and
development of SX –EW plants. Project manager, Mr David Readett principal of MWorx Pty Ltd is a metallurgical engineer
with over twenty five years’ experience in the mining and processing industry and specialises in hydrometallurgy. Mr
Readett has distinctive expertise in nickel laterite heap leaching having been involved with the recent development of
the heap leach program at the adjacent Murrin Murrin Nickel Refinery.
The Study Scope included a review of the conceptual flow sheet design, preliminary mass balance, conceptual layout,
process design, order of magnitude capital and operating costs and preliminary equipment lists. The study considered a
range of production scenarios to establish the most economically attractive development option for the Project.
Highlights from the study are outlined below.
Page 2 - GME Resources Ltd - Annual Report 2014
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2011 CHAIRMAN’S REVIEW CONTINUED
Figure 1 - Bateman Tenova designed and built Copper SX EW plant in Chile. SX units are located in two banks in
foreground. Electrowinning refinery is housed in the large building at rear. Plant is similar in conceptual layout
and size (1.5mtpa) to the proposed NiWest processing facility.
Study Highlights
•
The study concluded that a heap leaching operation combined with a processing plant utilising
Direct Solvent Extraction and Electrowinning (DSX –EW) to upgraded purified nickel solutions
from the heap leach to produce LME nickel cathode via electrowinning is technologically and
potentially economically sound.
•
Optimum start up project to comprise a fully integrated 1.5 mtpa Combined Heap Leach - DSXEW Process Plant.
•
The study forecast a capital cost of $461 million for the NiWest Project which ranks it as one
of the most capital competitive nickel laterite developments in the world.
•
Development of a 1.5 mtpa heap leaching operation coupled to a DSX –EW processing plant
would result in an Annual Production Rate of 14,000 tonnes nickel cathode and 540 tonnes
cobalt.
•
The average Life Of Mine operating cost is estimated to be US$5.68/lb
•
Project Net Present Value of A$934 million and Internal Rate of Return of 37%.
•
The defined resources support a minimum 20 year operation with potential to extend further
or scale up production.
•
The study highlights that the proposed HL-DSX-EW processing route offers a significantly lower
capital cost over the alternative and more complex High Pressure Acid Leach (HPAL) process.
Page 3 - GME Resources Ltd - Annual Report 2014
OPERATIONS REPORT 2014 CONTINUED
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The study recommended that the Company proceed with a high level metallurgical test program to validate the “Proof
of Concept” test work. To this end, the Company recently completed a Sonic Core drilling program that generated over
five tonnes of sample to be used in the test program which is designed to cover all aspects of the flow sheet and provide
engineering data required to feed into a Definitive Feasibility Study (DFS). The test work to be covered in the program
includes:
Bottle roll tests to determine the extent and variability of typical leach kinetics and acid consumptions.
Crushing, agglomeration and heap stacking/height optimisation test work including hydrodynamic and geotechnical
work to be undertaken at HydroGeoSense laboratory in USA.
Large scale column test that will generate up to eight tonnes of pregnant nickel solution
Conduct both batch and continuous pilot plant tests for solution neutralisation/iron removal and Direct Solvent
Extraction (DSX).
The final stage of the NiWest flow sheet, which has been developed along similar lines to a copper processing plant,
includes an Electrowinning (EW) refinery that will produce LME grade nickel cathode and a high grade cobalt carbonate
concentrate.
Completing the current test program which is expected to take twelve months will be a major milestone for the
Company in its aspiration to move the NiWest Project forward to development. The test program is expected to deliver
a number of key outcomes that will allow the project to continue seamlessly into a DFS.
Over the past seven years, the Company has invested significant funds aimed at advancing the NiWest Project. Feasibility
work from 2008 to 2010 included a major resource drilling program that resulted in a substantial upgrade in resource
quality.
Metallurgical test programs have been a feature of ongoing work since 2007. In December 2013 two patents lodged by
the Company over its Acid Regeneration and Ore Pelletisation process were granted. Both of these important innovations
will be utilised in the NiWest flow sheet.
The acid regeneration process is designed to reduce acid consumption by regenerating a significant proportion of the
acid for re use in the heap leach stage. Test work to date indicates that up to 30% of the consumed acid can be
regenerated.
The pelletisation process is designed to stabilise the ore and commence the leaching cycle prior to the pellets being
stacked on the heap. Both leach cycle and stabilisation of the heap is a critical aspect in any heap leaching operation.
Further refinement of the acid regeneration process is planned and is expected to lead to a greater percentage of acid
regenerated.
Water resource identification and test bores have been established at the Mt Kilkenny project area which includes a
2.0gl water licence. The water licence is sufficient to supply around 70% of the water requirement to undertake the
proposed 1.5 mtpa operation. Further work on water resource development will be addressed in the DFS.
The Company also holds an active permit for a trial mine and heap leach at the Hepi project. The permit which was due
to expire in 2015 has been extended until 2019. Environmental surveys covering flora and fauna baseline studies have
been completed at Hepi. Base line environmental surveys have also been completed at Mt Kilkenny.
Further details on the results from Scoping Study are outlined below.
Page 4 - GME Resources Ltd - Annual Report 2014
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OPERATIONS REPORT 2014 CONTINUED
Figure 2 - GME NiWest Poject Locations
Financial Results generated from the Scoping Study
•
Operating Cost: US$5.68/lb nickel (includes royalties and sustaining capital).
•
Capital Cost: A$461 million (includes contingency of A$103 million).
•
Operating Surplus: A$2.8 billion pre-tax (includes capital payback).
•
NPV: A$934 million pre-tax (10% discount).
•
Internal Rate of Return: 37%.
•
Pay Back on Capital: 2 years.
•
Low capital intensity: US$12.75/lb annual nickel production.
Page 5 - GME Resources Ltd - Annual Report 2014
OPERATIONS REPORT 2014 CONTINUED
Table 1: Summary of financial model including parameters and assumptions
Declared Resource Base (JORC 2004)
Million
Tonnes
%Ni
%Co
Ni Metal
Co Metal
34.22
1.04
0.07
355,198
23,037
Indicated
22.41
0.99
0.06
222,273
14,189
Inferred
19.09
0.96
0.06
184,038
11,303
Total Resource (0.8% Ni cut-off grade)
75.73
1.01
0.06
761,509
48,529
29.5
1.28
0.08
377,600
23,600
72%
40%
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Measured
Mining Inventory
Average Nickel Production Per Annum
14,000
Cobalt Production Per Annum
540
Extraction Rates
Life of Mine
20 years
Nickel Price
US$10/lb
Cobalt Price
US$25/lb
Assumed Acid Price
A$75/tonne
Capital Cost Estimate
$461 million
LOM Capital Estimate
$606 million
Operating Cost Breakdown
Mining US$1.02/lb
Processing
US$4.18/lb
Administration / Royalties
US$0.49/lb
Total Operating Costs
US$5.68/lb
Cumulative Operating Revenue
A$7.71 billion
Cumulative Operating Surplus (Pre Tax)
A$2.82 billion
NPV 10% discount (Pre Tax)
A$934 million
Internal Rate of Return
Capital Payback
Exchange Rate US$1 : AUS$0.85
Page 6 - GME Resources Ltd - Annual Report 2014
37%
2.0 years
OPERATIONS REPORT 2014 CONTINUED
Table 2: Capital cost estimate - Break down of major capital items
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Description
Heap Leach & Solution Neutralisation
$88,058,202
SX EW Plant
$88,032,651
Acid Regeneration
$34,860,095
Power Plant and Electrical Installation
$36,399,419
Calcrete Plant
$9,158,879
Water Supply
$27,788,345
Piping
$12,196,581
Site Buildings
$12,484,632
Site Establishment
$20,389,831
EPCM PCM PCN
$17,467,715
Vendor
$4,822,422
First Fill
$3,985,811
Critical Spares
$1,992,905
Sub Total
Contingency
Total
$357,637,489
$103,128,033
$460,765,522
Page 7 - GME Resources Ltd - Annual Report 2014
OPERATIONS REPORT 2014 CONTINUED
Resource Estimate
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Ravensgate Mining Industry Consultants have completed a resource estimate for the NiWest Project. The resource
estimate was last updated in April 2011 and is in accordance with JORC 2004 guidelines (refer Annual Mineral Resource
Statement). The NiWest data base contains drilling information and assay results from 4,196 bore holes for 131,800
metres of drilling.
The project comprises of seven separate project areas in close proximity containing resources of various sizes. Resources
are well defined with over 70% drill tested to measured and indicated categories. All of the NiWest resources are located
on granted mining leases. (Refer to NiWest Project plan).
Table 3: NiWest Reported resource estimate – (JORC 2004)
0.7% COG
0.8% COG
1.0% COG
1.2% COG
CATEGORY
Tonnes
(Millions)
%Ni
%Co
Ni Metal
(tonnes)
Co Metal
(tonnes)
Measured
45.86
0.96
0.06
Indicated
32.28
0.92
0.06
Inferred
30.32
0.89
0.06
Combined
108.46
0.93
0.06
1,008,678
65,076
CATEGORY
Tonnes
(Millions)
%Ni
%Co
Ni Metal
(tonnes)
Co Metal
(tonnes)
Measured
Indicated
34.22
1.04
0.07
22.41
0.99
0.06
Inferred
19.09
0.96
0.06
Combined
75.73
1.01
0.06
764,772
45,432
CATEGORY
Tonnes
(Millions)
%Ni
%Co
Ni Metal
(tonnes)
Co Metal
(tonnes)
Measured
19.21
1.19
0.08
Indicated
8.47
1.14
0.08
Inferred
5.07
1.14
0.07
Combined
32.75
1.17
0.08
383,175
26,200
CATEGORY
Tonnes
(Millions)
%Ni
%Co
Ni Metal
(tonnes)
Co Metal
(tonnes)
Measured
7.43
1.37
0.09
Indicated
2.23
1.31
0.09
Inferred
1.29
1.28
0.09
Combined
10.95
1.34
0.09
146,730
9,855
Process Flow Sheet
The NiWest Project aims to produce LME cathode nickel and a cobalt carbonate precipitate. The process flow sheet
consists of open cut mining, crushing, agglomeration and ore stacking, multistage leaching, acid regeneration, iron
removal/neutralisation, solvent extraction and electrowinning.
The heap leach solution circuit incorporates the iron removal and acid regeneration process. The heap leach utilises a
dynamic on/off pads system whereby spent ore is removed and disposed of in a pit.
The Pregnant Liquor Solution (PLS) generated from the heap is directed to solution neutralisation where iron is removed
followed by solvent extraction and electrowinning. Cobalt is recovered separately as a precipitated carbonate product.
Residues generated from DSX-EW process are co-disposed in a pit with spent ore.
Sulphuric acid will be sourced from the region and transported to site via rail and road transport. The plant’s energy
requirements will be provided by natural gas fired generators, with gas sourced from a gas pipeline running through the
project. Calcrete for neutralisation can potentially be sourced in the vicinity of the project.
Page 8 - GME Resources Ltd - Annual Report 2014
OPERATIONS REPORT 2014 CONTINUED
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Mining Method
The NiWest resources are of typical geometry found with
nickel laterite deposits which are generally shallow, flat
lying zones of mineralised lateritic clays. All of the
mineralisation is located between surface and 60 metres.
The assumed mining method is via standard open pit
methods, and to be mostly free digging with conventional
excavators and rigid haul trucks to deliver ore to surface.
The mine schedule used in the study assumes higher strip
ratios in the first five years, averaging 9:1 as higher grade
ore is sourced preferentially. The average strip ratio for
life of mine reduces to 6.9:1 whereby mined lower grade
stockpiled ore is utilised in the later stages of the project.
Figure 3 - NiWest
Project Schematic
Flow Sheet
The current mining schedule determined that ore is
sourced from only three project areas, Hepi, Eucalyptus
and Mt Kilkenny, The mining plan as determined is based
on grade and distance from the plant and includes a
total cost of $147 million for haulage of ore from Hepi and
Eucalyptus projects to the proposed plant site at Mt
Kilkenny. Further detailed optimisations will be
undertaken to identify cost benefits that can be adopted
to improve the model by scheduling high grade ores from
other NiWest project areas.
Figure 4 - Pit shells at the Mt Kilkenny project area demonstrating the scale of the resource area
Page 9 - GME Resources Ltd - Annual Report 2014
OPERATIONS REPORT 2014 CONTINUED
Company Funding
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In May this year the Company offered shareholders the opportunity to acquire additional shares in the Company through
a non-renounceable rights issue. The one for five entitlement issue priced at 2.7cents was strongly supported (66.9%
take-up) and raised $1.39 million. A further $687,821 was raised subsequent to the end of the financial year, through
the placement of the remaining shortfall bringing the total raised to $2.07 million.
MOU with Panoramic Resources Ltd.
The Company welcomes Panoramic Resources Limited (Panoramic) as a shareholder after agreeing to take up $500,000
worth of shares in the shortfall through a strategic placement which included the formalisation of a Memorandum of
Understanding (MoU) relating to the NiWest Nickel Laterite Project.
The MOU provides Panoramic with the opportunity to review the NiWest Project and provide advice on future
exploration, project optimisation, development as well as commercialisation and financing alternatives.
The Company has agreed to grant Panoramic a period of exclusivity to 30 June 2015 to complete the review and if it
sees fit, provide GME with commercial terms for consideration with regard to Panoramic's potential involvement in the
Project.
About Panoramic
Panoramic is an established Western Australian mining company operating two 100% owned underground nickel sulphide
mines, the Savannah Project in East Kimberley, and the Lanfranchi Project near Kambalda. On a group basis, Panoramic
had a record production of 22,256t contained nickel in FY2014 and is forecasting to produce between 20,000 and 21,000t
contained nickel in FY2015. Panoramic has a solid balance sheet, no bank debt and a growing nickel, gold and PGM
resource base, employing more than 400 people (including contractors). The Company had a market capitalisation of
approximately $250m and cash and receivables at 30 June 2014 of approximately $96.7m.
Next Step
Over the coming year the Company’s focus will be on the metallurgical program that has commenced and will run
continuously throughout the year. The outcomes from this work will provide the basis to undertake a more accurate
evaluation as to capital and operating costs estimates for the NiWest project development, at which time a decision will
be made as to resuming work on the DFS.
The Company looks forward to providing updates on its activities throughout the year.
Page 10 - GME Resources Ltd - Annual Report 2014
OPERATIONS REPORT 2014 CONTINUED
GOLD PROJECTS: GOLDEN CLIFFS NL (GME - 100 %)
The Company, through its subsidiary Golden Cliffs NL owns a number of prospective gold projects in the Leonora
/Laverton region. Although the projects don’t present as long term standalone development projects they do have
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potential to provide near term cash flow. The Company’s strategy is to continue to explore and evaluate these assets
with targeted work programs that focus on quick start-up, high-grade, mine and haul projects.
Over the past year the company has continued to explore these projects with work undertaken at Laverton Downs,
Abednego and the Devon gold project, however funding for the gold assets has been limited and this has resulted in a
somewhat slower rate of progress. Positive results continue to flow from exploration activities completed at a number
of the projects, details of which are outlined below.
Devon Gold Project
The Devon gold project is the most advanced of the Company’s gold assets. The Devon hosts a JORC compliant resource
containing over 51,000 ounces. The project is shaping up as ideal small scale open pit development opportunity for the
Company. Mining leases were granted in December 2013 which now allows the Company to push forward with a mining
proposal. Miscellaneous licences for construction of a haul road have also been granted .Heritage surveys have been
completed and negotiations on an ore processing arrangements are in progress.
This year the Company plans to drill test approximately 240 metres of the southern strike where high gold grades have
been encountered in costean sampling and recent drilling. The infill program is designed to drill out this area of the
resource on a 20 metre X 10 metre pattern to a vertical depth of forty metres. Exceptional gold grades have been
recorded over the southern strike which is not affected by the historical underground workings.
Figure 5 - GME Gold Poject Locations
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OPERATIONS REPORT 2014 CONTINUED
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The results from this program will be used to
complete an economic evaluation on the
development of a small high grade open pit mine.
Cross sections (figures 8-10) show gold
intersections from previous drilling and the planned
drill holes.
The Devon Gold Project is situated over the world
class, significantly gold endowed, Laverton
Greenstone Belt within the Central Laverton
Domain of the Laverton Tectonic Zone. The Sunrise
Dam (>7.7 million ounces) and Red October (>0.5
million ounces) and Wallaby/Granny Smith deposits
(>.8.8 million ounces) deposits occur to the north
of the Devon Gold Mine.
Below: Figure 7 - Devon drill hole plan showing
high grade zone that that is to be targeted for a
starter pit. Cross section markers are indicated
by the red line. The following cross section
diagrams show the high grade intersections from
previous drilling.
Page 12 - GME Resources Ltd - Annual Report 2014
Above: Figure 6 - Devon Gold Project location
plan
Table 4: Devon Resource Estimate
(1 gram / tonne cut-off grade)
JORC (2014)
Classification
Tonnes
Gold Contained
Grade g/t
Ounces
Gold
0
Measured
0
Indicated
346,165
3.07
34,171
Inferred
157145
3.52
17,786
503,310
3.21
51,957
Total
OPERATIONS REPORT 2014 CONTINUED
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Figure 8-10 - Devon cross section diagrams show the high grade intersections from previous drilling.
Page 13 - GME Resources Ltd - Annual Report 2014
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OPERATIONS REPORT 2014 CONTINUED
Abednego Project
The Abednego project located 50 kilometres east of Leonora covering approximately 16 km2. The area is prospective
for gold and base metals. Previous exploration drilling has focused on gold mineralisation over the Federation Well Gold
workings and the Sonex gold anomaly.
In May the company completed a 24 hole air core drill program at the Federation prospect. The program was designed
to test the north northeast trending Federation Shear Zone - associated with steeply, east southeast dipping quartz
veins. Results from the program identified a broad, shallow moderately mineralised structure over 500 metres of strike
that is open in all directions. A follow up work program is planned to test the continuity of the mineralisation at depth.
Drilling is also planned for the Sonex prospect located two kilometres south east of the Federation where previous
drilling recorded a number of high grade intersections.
High lights from the drilling at Federation Well are listed below
14FDAC002
10 metres averaging
1.91 g/t from 22 metres
14FDAC003
13 metres averaging
1.73 g/t from 15 metres
14FDAC004
11 metres averaging
1.14 g/t from 10 metres
14FDAC006
10 metres averaging
1.99 g/t from 38metres
14FDAC008
7 metres averaging
2.01 g/t from 9 metres
14FDAC009
2 metres averaging
8.21g/t from 23 metres
14FDAC014
8 metres averaging
1.49 g/t from 42 metres
14FDAC017
4 metres averaging
2.13 g/t from 20 metres
Page 14 - GME Resources Ltd - Annual Report 2014
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OPERATIONS REPORT 2014 CONTINUED
Figure 11 - GME Abednego Poject Location
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OPERATIONS REPORT 2014 CONTINUED
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Figure 12-13 - Federation Prospect cross sections
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OPERATIONS REPORT 2014 CONTINUED
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Figure 14-15 - Federation Prospect cross sections
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OPERATIONS REPORT 2014 CONTINUED
Figure 16 - Federation Prospect Plan
Page 18 - GME Resources Ltd - Annual Report 2014
OPERATIONS REPORT 2014 CONTINUED
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Laverton Downs Project- Fairfield Gold Prospect
The Fairfield Gold Prospect is situated on granted mining lease M38/1266 located 15 kilometres north of the Laverton
town ship. There are numerous historical workings along the strike length of the zone and drilling has extended
mineralisation to a depth of 50 metres. Mineralisation at Fairfield is hosted by quartz veins associated with the steep
west dipping lithological contact between hanging wall basalt and the footwall package of felsic and clastic sediments.
In April this year the Company completed a small infill air core drilling program to verify results from drilling programs
undertaken by previous explorers. The program was successful in repeating previous high grade results and has upgraded
the potential to define a small high grade gold deposit in line with the Company’s strategy. Significant results from the
program are listed below along with a number of cross section diagrams that show drill holes results. Follow up drilling
is warranted to establish a resource estimate for the project.
Fairfield Drilling Highlights
14FAC001
3 metres averaging
17.1 g/t from 42 metres
14FAC006
4 metres averaging
3.6 g/t from 22 metres
14FAC010
2 metres averaging
7.3 g/t from 33 metres
14FAC011
1 metre averaging
9.6 g/t from 1 metre
14FAC014
3 metres averaging
2.0 g/t from 20 metres
Figure 17 - Fairfield Project cross sections
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OPERATIONS REPORT 2014 CONTINUED
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Figure 18-19 - Fairfield Project cross sections
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OPERATIONS REPORT 2014 CONTINUED
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Competent Persons Statement
The information in this report that relates to Exploration results amd Mineral Resources is based on information
compiled by Mr Stephen Hyland of Ravensgate Resource Consultants. Mr Hyland is a Fellow of The Australasian Institute
of Mining and Metallurgy. Mr Hyland is a Principal Consultant with Ravensgate Minerals Industry Consultants who
consults to the Company. Mr Hyland has sufficient experience, which is relevant to the style of mineralization and type
of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined
in the 2004 Edition of the "Australasian Code for Reporting of Mineral Resources and Ore Reserves”. Mr Hyland consents
to the inclusion in the report of the matters based on information provided in the form and context in which it appears.
The information in this announcement that relates to Processing / Engineering and related operating and capital cost
estimates is based on information reviewed by Mr David Readett (B.E. Met Eng., FAusIMM, CP (Met)). Mr Readett is an
independent consulting engineer working through a Company known as MWorx Pty Ltd. Mr Readett is a Chartered
Professional Metallurgical Engineer and has 25 years of relevant experience in this area of work. Mr Readett consents
to the inclusion in this announcement of the matters based on information provided by him and in the form and context
in which it appears.
The information in this report that relates to Gold Exploration Results and is based on information compiled by Mr Mark
Hill who is a member of The Australasian Institute of Geoscientists. Mr Hill is a Principal Consultant with Exman
Consultancy. Mr Hill has sufficient experience, which is relevant to the style of mineralization and type of deposit
under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012
Edition of the "Australasian Code for Reporting of Mineral Resources and Ore Reserves. Mr Hill consents to the inclusion
in the report of the matters based on information provided in the form and context in which it appears.
Forward Looking and Cautionary Statements
Some statements in this report regarding estimates or future events are forward-looking statements. They include
indications of, and guidance on, future earnings, cash flow, costs and financial performance. Forward-looking
statements include, but are not limited to, statements preceded by words such as “planned”, “expected”, “projected”
“estimated” “may”, “scheduled”, “intends”, “potential”, “could” “nominal” “conceptual” and similar expressions.
Forward looking statements, opinions and estimates included in this announcement are based on assumptions and
contingencies which are subject to change without notice, as are statements about market and industry trends, which
are based on interpretations of current market conditions. Forward looking statements are provided as a general guide
only and should not be relied on as a guarantee of future performance. Forward looking statements may be affected
by a range of variables that could cause actual results to differ from estimated results. The Company believes it has
a reasonable basis for making the forward looking statements in this announcement
Page 21 - GME Resources Ltd - Annual Report 2014
OPERATIONS REPORT 2014 CONTINUED
Tenement Schedule
As at 30 June 2014
For personal use only
Project
Abednego West
Tenements
Company Interest
Comments
P39/4729 - 4733, P39/4736 - 4738
Golden Cliffs 100%
Placer Royalty 2% Gold
NiWest 100% Ni
Franco Nevada Royalty
NiWest 100%
Minara Royalty
NiWest 100%
Old City gold rights
P39/4751, P39/4572, P39/4496,
M39/0825, M39/0427
Eucalyptus
M39/744
M39/289, M39/430
M39/344, M39/666
M39/674, M39/313, M39/568
M39/802 - 803
Ni Royalty
P39/5495
NiWest 100%
Hawk Nest
M38/218
Golden Cliffs 100%
Hepi
M39/717 - 718, 819
NiWest 100%
Laverton Downs
E38/1876, M38/1266
Golden Cliffs 100%
Linden
ML39/1077 - 1078
Golden Cliffs 100%
L39/222
GME 100%
ML 39/500
GME 10%
90% Exterra Resources
Mertondale
M37/591
NiWest 100%
Mt Kilkenny
E39/1784 ELA39/1794,
M39/878 - 879
NiWest 100%
Retford Royalty
Golden Cliffs rights
Nickel laterite royalty
to non-nickel laterite
20 cents per tonne
Murrin Murrin
M39/426, 456, 552, 553 and 569
(Minara Resources)
Murrin North
M39/758
NiWest 100%
Waite Kauri
M37/1216
P37/8427 -8428
NiWest 100%
NiWest 100%
Wanbanna
M39/460
NiWest 80%
20% Wanbanna Pty Ltd
Misc. Licences
L39/194, L37/175, L31/46, L40/25
NiWest 100%
Haul Roads, Water
L39/215, L39/177, L37/205
LEGEND
E:
Exploration Licence
P:
Prospecting Licence
PLA: Prospecting Licence Application
M:
Mining Lease
ELA: Exploration Licence Application
L:
Miscellaneous Lease
MLA: Mining Lease Application
Page 22 - GME Resources Ltd - Annual Report 2014
Resources
OPERATIONS REPORT 2014 CONTINUED
Annual Mineral Resources Statement
For personal use only
NiWest Nickel Laterite Project – North Eastern Goldfield Western Australia
Summary of Mineral Resource Estimate Reported according to JORC (2004)
0.7% COG
0.8% COG
1.0% COG
1.2% COG
CATEGORY
Tonnes
(Millions)
%Ni
%Co
Ni Metal
(tonnes)
Co Metal
(tonnes)
Measured
45.86
0.96
0.06
Indicated
32.28
0.92
0.06
Inferred
30.32
0.89
0.06
Combined
108.46
0.93
0.06
1,008,678
65,076
CATEGORY
Tonnes
(Millions)
%Ni
%Co
Ni Metal
(tonnes)
Co Metal
(tonnes)
Measured
Indicated
34.22
1.04
0.07
22.41
0.99
0.06
Inferred
19.09
0.96
0.06
Combined
75.73
1.01
0.06
764,772
45,432
CATEGORY
Tonnes
(Millions)
%Ni
%Co
Ni Metal
(tonnes)
Co Metal
(tonnes)
Measured
19.21
1.19
0.08
Indicated
8.47
1.14
0.08
Inferred
5.07
1.14
0.07
Combined
32.75
1.17
0.08
383,175
26,200
CATEGORY
Tonnes
(Millions)
%Ni
%Co
Ni Metal
(tonnes)
Co Metal
(tonnes)
Measured
7.43
1.37
0.09
Indicated
2.23
1.31
0.09
Inferred
1.29
1.28
0.09
Combined
10.95
1.34
0.09
146,730
9,855
Review of Material Changes
The last reported resource statement for NiWest Nickel Laterite Project was on 6 April November 2011 (ASX
announcement). There has been no material change to the mineral resource estimate over the past 12 months. Nominal
changes to the second decimal point have occurred in combined resource totals due to rounding protocols.
Devon Gold Project - North Eastern Goldfields Western Australia
Summary of Mineral Resource Estimate Reported according to JORC (2004) at 1 g/t cut-off grade
JORC (2014)
Classification
Tonnes
Gold Grade
g/t
Measured
0
-
Contained
Ounces
Gold
0
Indicated
346,165
3.07
34,171
Inferred
157145
3.52
17,786
503,310
3.21
51,957
Total
Page 23 - GME Resources Ltd - Annual Report 2014
OPERATIONS REPORT 2014 CONTINUED
For personal use only
Review of Material Changes
The last reported resource statement for Devon Gold Project was made on 30 January 2013 (ASX announcement). There
has been no material change to the mineral resource estimate over the past 12 months.
Governance and Quality Control
The Company ensures all resources calculations are undertaken and reviewed by independent, internationally
recognised industry consultants.
All drill hole data is stored in-house within a commercially available purpose designed database management system
and subjected to industry standard validation procedures. Quality control on resource drill programs have been
undertaken to industry standards with implementation of appropriate drilling type, survey data collection, assay
standards, sample duplicates and repeat analyses.
Competent Person Statement
The information in this report that relates to Mineral Resources is based on information reviewed and compiled by Mr
Stephen Hyland of Ravensgate Resource Consultants. Mr Hyland is a Fellow of The Australasian Institute of Mining and
Metallurgy. Mr Hyland is a Principal Consultant with Ravensgate Minerals Industry Consultants who consults to the
Company. Mr Hyland has sufficient experience, which is relevant to the style of mineralization and type of deposit
under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004
Edition of the "Australasian Code for Reporting of Mineral Resources and Ore Reserves”. Mr Hyland consents to the
inclusion in the report of the matters based on information provided in the form and context in which it appears.
Page 24 - GME Resources Ltd - Annual Report 2014
Corporate Governance Statement
For personal use only
INTRODUCTION
The Board of Directors of GME Resources Limited (the “Company”) has adopted the following Corporate Governance
Principles promulgated by the ASX Corporate Governance Council (second edition) and is responsible for the adherence
to these Principles. These Principles and Practices are reviewed regularly and upgraded or changed to reflect changes
in law and what is regarded as best practice. A description of the Company's main Corporate Governance Principles and
Practices is set out below.
ROLE OF THE BOARD
The Board has adopted the following Statement of Matters for which the Board will be responsible:
(1)
Review and determine the Company's strategic direction and operational policies;
(2)
Review and approve business plans, budgets and forecasts and set goals for management;
(3)
Appoint and remunerate Chief Executive Officer and Senior Staff;
(4)
Review performance of Chief Executive Officer and Senior Staff;
(5)
Review financial performance against Key Performance Indicators on a monthly basis;
(6)
Approve acquisition and disposal of tenements;
(7)
Approve exploration and mining programs;
(8)
Approve capital, development and other large expenditures;
(9)
Review risk management and compliance;
(10) Oversee the Company's control and accountability systems;
(11) Report to shareholders; and
(12) Ensure compliance with environmental, taxation, Corporations Act and other laws and regulations.
MANAGING DIRECTOR
GME's most senior employee is the Managing Director who is appointed and subject to annual reviews by the Board. The
Managing Director recommends policies, strategic direction and business plans for the Board's approval and is responsible
for managing the Company's day-to-day business.
BOARD INDEPENDENCE
The Board consists of three directors, but up to 10 directors can serve on the board. Mr James Sullivan is the only
executive; the remainder are non-executive. Currently the three Directors are:
Michael D Perrott
Chairman
Director since 1996
James N Sullivan
Managing Director
Director since 2004
Peter R Sullivan
Director
Director since 1996
Mr P Sullivan is considered an Independent Director on the Board according to the definitions by the Australian Securities
Exchange Corporate Governance Council ("Council") as is the Chairman Mr Perrott.
Mr J Sullivan is an executive and is therefore not considered "independent" in accordance with the definitions of the
Council.
As such, the Company complies with the Council's recommendation, Item 2.1, that the majority of the Company's
Directors should be Independent Directors.
Page 25 - GME Resources Ltd - Annual Report 2014
CORPORATE GOVERNANCE CONTINUED
The Board has in addition adopted a series of safeguards to ensure that independent judgement is applied when
considering the business of the Board:
•
For personal use only
•
Directors are entitled to seek independent professional advice at the Company's expense. Prior written approval
of the Chairman is required but this is not unreasonably withheld.
Directors having a conflict of interest with an item for discussion by the Board must absent themselves from a
board meeting where such item is being discussed before commencement of discussion on such topic.
•
The Independent Directors confer on a "needs" basis with the Chairman with such discussion if warranted and
considered necessary by the Independent Directors.
•
The Board considers non-executive directors to be independent even if they have minor dealings with the Company
provided they are not a substantial shareholder. Transactions with a value in excess of 5% of the Company's annual
operating costs are considered material. A director will not be considered independent if he has transactions in
excess of this materiality threshold.
TENURE OF THE BOARD
The Directors are expected to review their membership of the Board from time to time taking into account the length
of service on the Board, age, qualification and experience in light of the needs of the Company and direction of the
Company together with such other criteria considered desirable for composition of a balanced board and the overall
interests of the Company.
A Director is expected to resign if the remaining Directors recommend that a Director should not continue in office, but
is not obliged to do so.
CHAIRMAN
The current Chairman is Mr Michael D Perrott - AM. Mr Perrott brings a wealth of business experience, connections and
drive to the Board. The Chairman's role is separated from the role of the Managing Director.
The Chairman's role includes:
•
•
•
•
•
•
Providing effective leadership on formulating the Board's strategy;
Representing the views of the Board to the public;
Ensuring that that the Board meets at regular intervals throughout the year and that minutes of meeting accurately
record decisions taken and where appropriate the views of individual Directors;
Guiding the agenda, information flow and conduct of all board meetings;
Reviewing the performance of the Board of Directors; and
Monitoring the performance of the management of the Company.
NOMINATION COMMITTEE
Due to the small size of the Company and the number of Board members, the Board does not have a formal nomination
committee structure. Any new directors will be selected according to the needs of the Company at that particular time,
the composition and the balance of experience on the Board as well as the strategic direction of the Company.
Should the need arise to consider a new Board member, some or all of the Directors would form the committee to
consider the selection process and appointment of a new director.
At each annual general meeting the following directors retire:
•
•
•
One third of directors (excluding the Managing Director);
Directors appointed by the Board to fill casual vacancies or otherwise;
Directors who have held office for more than three years since the last general meeting at which they were
elected.
DETAILS ON CURRENT DIRECTORS
Details on current Directors, including their skills and experience, are included in the Directors' Report.
Page 26 - GME Resources Ltd - Annual Report 2014
CORPORATE GOVERNANCE CONTINUED
ETHICAL AND RESPONSIBLE DECISION-MAKING
For personal use only
In making decisions, the Directors of the Company, its officers and employees, take into account the needs of all
stakeholders:
•
•
•
•
•
•
Shareholders;
Employees;
Community;
Creditors;
Contractors; and
Government (Federal, State and Local).
The Directors, officers and employees of the Company are expected to:
•
•
•
•
•
•
Comply with the laws and regulations both by the letter and in spirit;
Act honestly and with integrity;
Avoid conflicts of interest by not placing themselves in situations which result in divided loyalties;
Use the Company's assets responsibly and in the interests of the Company, not take advantage of property,
information or position for personal gain or to compete with the Company;
To keep non-public information confidential except where disclosure is authorised or legally mandated; and
Be responsible and accountable for their actions and report any unethical behaviour.
TRADING IN COMPANY SECURITIES
The Company encourages Directors and employees to adopt a long-term attitude to their investment in the Company’s
securities. All Directors and employees (including their immediate family or any entity for which they control
investment decisions), must ensure that any trading in securities issued by the Company is undertaken within the
framework set out in the Securities Trading Policy.
The Securities Trading Policy does not prevent Directors or employees (including their immediate family or any entity
for which they control investment decisions) from participating in any share plan or share offers established or made by
the Company. However, Directors or employees are prevented from trading in the securities once acquired if the
individual is in possession of price sensitive information not generally available to all security holders.
In keeping with recent listing rule amendments, additional restrictions are placed on trading by Directors, executives
and other personnel as determined by the Chairman and Company Secretary from time to time (‘Key Management
Personnel’).
Key management personnel must not deal in Company Securities at any time if in possession of any inside information
relating to those securities.
In addition to the overriding prohibition against dealing in the Company's securities when a person is in possession of
inside information, Key Management Personnel and their associated parties are at all times prohibited from dealing in
the Company's securities during prescribed ‘closed’ periods. The Company has nominated closed periods to be during
the week prior to the release of the Company’s Quarterly Reports (including the Appendix 5B) unless exceptional
circumstances apply.
The Securities Trading Policy also includes a clause prohibiting directors and executives from entering into transactions
in associated products which operate to limit the economic risk of security holdings in the Company over unvested
entitlements.
In accordance with Listing Rules, a director must notify the ASX within 5 business days after any change in the director's
relevant interest in securities of the Company or a related body corporate of the Company.
A director must notify the Company Secretary in writing of the requisite information within 2 business days in order for
the Company Secretary to make the necessary notifications to ASIC and ASX as required by the Corporations Act and the
ASX Listing Rules.
Page 27 - GME Resources Ltd - Annual Report 2014
CORPORATE GOVERNANCE CONTINUED CORPORATE GOVERNANCE CONTINUED
INTEGRITY OF FINANCIAL REPORTING
GME's Managing Director and Company Secretary report in writing to the Board:
•
For personal use only
•
That the Company's financial reports are complete and present a true and fair view, in all material respects, of
the financial condition and operational results of the Company and Group; and
That the above statement is founded on a sound system of internal control and risk management which implements
the policies adopted by the Board and that the Company's risk management and internal controls are operating
efficiently in all material respects.
AUDIT COMMITTEE
The Company does not have a formal audit committee as, in the opinion of the Directors, the scope and size of the
Company's operations do not warrant it. As such the Company is not in strict compliance of the Council's
Recommendation 4.2 that the Board should establish an audit committee. It should be noted however that when the
Council's Recommendation was made it was emphasised that it was more relevant for large companies.
The Board regularly reviews the scope of audits, the level of audit fees and the performance of auditors.
The Board also is continually assessing to ensure the independence of the external auditor is maintained. The Company
will and does, if necessary, use other consultants to avoid any potential independence issues.
TIMELY AND BALANCED DISCLOSURE TO AUSTRALIAN SECURITIES EXCHANGE
The Company has procedures in place to identify matters that are likely to have a material effect on the price of the
Company's securities and to ensure those matters are notified to the Australian Securities Exchange in accordance with
its listing rule disclosure requirements.
Information to the market and media is handled by the Chairman, the Managing Director or the Company Secretary. In
particular, the Company Secretary has been nominated as the person responsible for communications with Australian
Securities Exchange. This role includes responsibility for compliance with the continuous disclosure requirements of the
Australian Securities Exchange Listing Rules and overseeing and coordinating information disclosures to Australian
Securities Exchange, analysts, brokers, shareholders the media and the public.
All disclosures to Australian Securities Exchange are posted on the Company's website soon after clearance has been
received from Australian Securities Exchange.
The Chairman, the Managing Director and Company Secretary are monitoring information in the marketplace to ensure
that a false market does not emerge in the Company's securities.
COMMUNICATION WITH SHAREHOLDERS
It is the Company's communication policy to communicate with shareholders and other stakeholders in an open, regular
and timely manner so that the market has sufficient information to make informed investment decisions on the
operations and results of the Company.
The information is communicated to the shareholders through:
•
•
•
•
•
•
Continuous disclosure announcements made to the Australian Securities Exchange;
Distribution of the annual report to shareholders together with a notice of meeting;
Posting of half-yearly results and all Australian Securities Exchange announcements on the Company's website;
Posting of all major drilling results;
Posting of all media announcements on the Company's website; and
Calling of annual general meetings and other meetings of shareholders to obtain approval for Board action as
considered appropriate.
On the Company's website, information about the Company's projects is shown.
At annual general meetings and other general meetings of shareholders, shareholders are encouraged to ask questions
of the Board of Directors relating to the operation of the Company.
Page 28 - GME Resources Ltd - Annual Report 2014
CORPORATE GOVERNANCE CONTINUED
For personal use only
RISK MANAGEMENT
Due to its size of operation and size of the Board, there is no formal board committee to identify, assess and monitor
and manage risk. Responsibility for day to day control and risk management lies with the Managing Director and Company
Secretary (financial risk) with reporting responsibility to the Board. The Board monitors risks including but not limited
to compliance with development and environmental approvals, tendering, contracting and development, pricing of
products, quality, safety, strategic issues, financial risk, joint venture, accounting and insurance. Any changes in the risk
profile for the Company are communicated to its stakeholders via an announcement to Australian Securities Exchange.
PERFORMANCE
The Board has adopted a self-evaluation process to measure its own performance. The Chairman evaluates the
performance of each director, and the Board evaluates the performance of the Chairman. Performance of senior
executives is evaluated by the Managing Director in cooperation with the Chairman. All performance evaluations are
measured against budget, goals and objectives set.
All Directors of the Board have access to the Company Secretary who is appointed by the Board. The Company Secretary
reports to the Chairman, in particular to matters relating to corporate governance.
All board members have access to professional independent advice at the Company's expense provided they first have
obtained the Chairman's approval which will not be unreasonably withheld.
REMUNERATION
Managing Director and Non-executive Directors
The Directors are remunerated for the services they render the Company and such services are normally carried
under normal commercial terms and conditions. Remuneration is also determined having regard to how Directors
remunerated for other similar companies, the time spent on the Company's matters and the performance of
Company. Engagement and payment for such services are approved by the other Directors with no interest in
engagement of services.
out
are
the
the
The Board has no retirement or termination benefits. Payments to all Directors are set out in the Director's Report.
Senior Executives
The remuneration of senior executives is discussed and determined by the Board upon receiving advice from the
Managing Director. The remuneration packages are set at levels intended to attract and retain the executives capable
of managing the Company's operations.
The remuneration of senior executives, where applicable, is set out in the Directors' Report.
General
Due to the staff size and the close involvement of the Board in the operations of the Company, the Company does not
operate a formal remuneration committee. All remuneration paid to the Chairman, Non-executive Directors, Executive
Directors and senior executives are all reviewed and discussed by the Board.
The Company does not operate an employee share option plan and there are no options outstanding issued to Directors.
INTERESTS OF STAKEHOLDERS
It is the Company's objective to create wealth for its shareholders and provide a safe and challenging environment for
employees and for the Company to be a valuable member of the community as a whole.
The Company's ethical and responsible behaviour is set out under the heading "Ethical and Responsible Decision-making".
The Company's core values are summarised as follows:
•
•
•
•
•
•
•
Provide value to its shareholders through growth in its market capitalisation;
Act with integrity and fairness;
Create a safe and challenging workplace;
Be participative and recognise the needs of the community;
Protect the environment;
Be commercially competitive; and
Strive for high quality performance and development.
Page 29 - GME Resources Ltd - Annual Report 2014
CORPORATE GOVERNANCE CONTINUED
Diversity
For personal use only
The Board has adopted a diversity policy that details the purpose of the policy and the employee selection and
appointment guidelines, consistent with the recommendations of the Corporate Governance Council. The Board believes
that the adoption of an efficient diversity policy has the effect of broadening the employee recruitment pool, supporting
employee retention, including different perspectives and is a socially and economically responsible governance practice.
The Company employs new employees and promotes current employees on the basis of performance, ability and
attitude. The Board is continually reviewing its practices with a focus on ensuring that the selection process at all levels
within the organisation is formal and transparent and that the workplace environment is open, fair and tolerant.
Gender Diversity
The Company, in keeping with the recommendations of the Corporate Governance Council provides the following
information regarding the proportion of gender diversity in the organisation as at 30 June 2014:
Proportion of female
/ total number of persons employed
Females employed in the Company as a whole
0/3
Females employed in the Company in senior positions
0/3
Females appointed as a Director of the Company
0/3
The recommendations of the Corporate Governance Council relating to reporting require a Board to set measurable
objectives for achieving diversity within the organisation, and to report against them on an annual basis. The Company
has implemented measurable objectives as follows:
MEASURABLE OBJECTIVE
OBJECTIVE
COMMENT
To ensure Company policies are consistent with
and aligned with the goals of the Diversity Policy.
Yes.
The Company’s selection, remuneration and
promotion practices are merit based and as such
are consistent with the goals of the Company’s
Diversity Policy.
To provide flexible work and salary arrangements
to accommodate family commitments, study and
self-improvement goals, cultural traditions and
other personal choices of current and potential
employees.
Yes.
The Company does, where considered
reasonable, and without prejudice,
accommodate requests for flexible working
arrangements.
To implement clear and transparent policies
governing reward and recognition practices.
Yes
The Company grants reward and promotion
based solely on merit and responsibility as part
of its annual and ongoing review processes.
The Company has not implemented specific measurable objectives regarding the proportion of females to be employed
within the organisation or implement requirements for a proportion of female candidates for employment and Board
positions. The Board considers that the setting of quantitative gender based measurable targets is not consistent with
the merit and ability based policies currently implemented by the Company.
The Board will consider the future implementation of gender based diversity measurable objectives when more
appropriate to the size and nature of the Company’s operations.
Page 30 - GME Resources Ltd - Annual Report 2014
For personal use only
Consolidated Financial Report 2014
GME Resources Ltd
ABN 62 009 260 315
CONTENTS
Directors’ Report
32-37
Auditor’s Independence Declaration
38
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
39
Consolidated Statement of Financial Position
40
Consolidated Statement of Changes In Equity
41
Consolidated Statement of Cash Flows
42
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
43-59
60
61-62
63
Page 31 - GME Resources Ltd - Annual Report 2014
Directors’ Report
Your Directors present their report of GME Resources Limited and its controlled entities for the financial year ended 30
June 2014. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:
For personal use only
DIRECTORS
The names of Directors in office at any time during or since the end of the year are:
Michael Delaney Perrott
James Noel Sullivan
Peter Ross Sullivan
(Non-executive - Chairman)
(Managing Director)
(Non-executive - Director)
Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.
PRINCIPAL ACTIVITIES
The principal activities of the consolidated entity are mineral exploration and investment.
No significant change in the nature of these activities occurred during the year.
OPERATING RESULTS
The net profit after income tax attributable to members of the Company for the financial year to 30 June 2014 amounted
to $ 452,632 (2013: Loss $939,194).
OVERVIEW OF OPERATING ACTIVITY
Nickel
The Company, through its 100% owned subsidiary NiWest Limited owns the NiWest Nickel Laterite Project which contains
100 million tonnes of lateritic nickel resources that have been systematically drill tested to JORC 2004 standards.
Over the past 5 years the Company has been progressing metallurgical and engineering studies aimed at commercialising
the development of a large scale Heap Leach operation coupled to a Direct Solvent Extraction and Electro Winning (HLDSX-EW) processing facility capable of producing LME grade nickel cathode.
After successfully completing “proof of concept” test work on the proposed HL-DSX-EW flow sheet in 2013, the Company
engaged Tenova Bateman Engineers and Mworx Pty Ltd to complete a scoping study that considered a range of
production scenarios to establish the most economically attractive development option for the NiWest Project. The study
reviewed the outcomes from the “proof of concept test” program completed in 2013 and included the major findings
from numerous metallurgical test programs completed, previous engineering studies and reported resource estimates.
The study concluded that a heap leaching operation combined with a processing plant utilising DSX to upgraded purified
nickel solutions from the heap leach to produce LME cathode via electrowinning is technologically and potentially
economically sound.
Gold
The Company also owns a number of gold assets through its 100% owned subsidiary Golden Cliffs NL. During the year
drilling, data review and metallurgical test work was carried out at a number of these projects.
A detailed review of the Group’s operations is set out in the Operations Report on pages 2-21 in the Annual Report.
Page 32 - GME Resources Ltd - Annual Report 2014
DIRECTORS’ REPORT CONTINUED
FINANCIAL POSITION
At the end of the financial year the consolidated entity had $1,543,752 (2013: $761,847) in cash and at call deposits.
For personal use only
Carried forward exploration and evaluation expenditure was $33,594,943 (2013: $32,347,488).
During the year issued capital increased from 384,663,864 to 436,121,505 shares at the end of 2014. The movement
related to a non-renounceable rights issue as announced in May 2014.
DIVIDENDS
No dividends have been paid or declared since the start of the financial year. No recommendation is made as to
dividends.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Group during the financial year.
AFTER BALANCE DATE EVENTS
No matters or circumstances have arisen since the end of the financial year which significantly affected or may
significantly affect the Group’s operations, the results of those operations or the Group’s state of affairs in future
financial years.
LIKELY DEVELOPMENTS
The Group’s areas of interest are in the exploration stage, and although the results of work carried out to date are
encouraging it is not possible to predict the likely developments. The Group will continue its mineral exploration and
investment activities with the object of finding further mineralised resources and exploiting those already discovered.
The Board is following a strategic plan for the growth of the Group, however, further information about likely
developments, future prospects and business strategies as they pertain to the operations and expected results of those
operations have not been included in this report as the Directors reasonably believe that disclosure of this information
would be likely to result in unreasonable prejudice to the Group.
INFORMATION ON DIRECTORS AND COMPANY SECRETARY
Michael Delaney Perrott AM BCom FAIM (Chairman)
Director since 1996
Mr Perrott has been involved in the construction and contracting industry since 1969. He is currently Chairman and
director of various listed and unlisted public and private companies. Mr Perrott is also a member of the Board of Notre
Dame University.
Mr Perrott has been Chairman of the Company since his appointment as a director in 1996.
Other current directorships of listed companies
Director of Schaffer Corporation Limited since February 2005.
Former directorships of listed companies in last 3 years
VDM Group Ltd from July 2009 to August 2014.
James Noel Sullivan FAICD (Managing Director)
Director since 2004
Mr Sullivan has over 20 years’ experience in commerce providing services to the mining and allied industries.
Mr Sullivan was instrumental in establishing and managing the Golden Cliffs Prospecting Syndicate which acquired and
pegged a number of prospective tenements in the Eastern Goldfields. The Golden Cliffs Prospecting Syndicate was
subsequently acquired by the Company in 1996. Mr Sullivan has extensive knowledge in mining and prospecting in the
North Eastern Goldfields and in particular on matters involving tenement administration, native title negotiation and
supply and logistics of services. Mr Sullivan’s practical knowledge in these areas is of great benefit to the Company as
it seeks to develop its assets for the benefit of its shareholders.
Other current directorships of listed companies
Mr Sullivan has been a director of Kumarina Resources Ltd (now Kumarina Resources Pty Ltd) since March 2010, Kumarina
was delisted in June 2013.
Former directorships of listed companies in last 3 years
Nil
Page 33 - GME Resources Ltd - Annual Report 2014
DIRECTORS’ REPORT CONTINUED
Peter Ross Sullivan BE, MBA (Non-executive Director)
Director since 1996
Mr Sullivan is an engineer and has been involved in the management and strategic development of resource companies
and projects for more than 20 years.
For personal use only
Other current directorships of listed companies
Mr Sullivan has been a director of Resolute Mining Limited since June 2001, Zeta Resources Limited since June 2013, and
Kumarina Resources Ltd (now Kumarina Resources Pty Ltd) since February 2011, Kumarina was delisted in June 2013.
Former directorships of listed companies in last 3 years
Nil
Mr Mark Edward Pitts B.Bus FCA
(Company Secretary)
Mr Pitts was appointed to the position of Company Secretary in February 2009. Mr Pitts is a Chartered Accountant with
over 25 years’ experience in statutory reporting and business administration. He has been directly involved with, and
consulted to a number of public companies holding senior financial management positions. He is a partner in the
corporate advisory firm Endeavour Corporate. Endeavour offers professional services focused on Company Secretarial
support, commercial and financial advice and supervision of ASIC and ASX compliance requirements.
REMUNERATION REPORT (AUDITED)
The remuneration report is set out in the following manner:
•
•
•
•
•
Policies used to determine the nature and amount of remuneration
Key Management Personnel
Service agreements
Share based compensation
Details of remuneration
Remuneration Policy
The Board of Directors is responsible for remuneration policies and the packages applicable to the Directors of the
Company. The broad remuneration policy is to ensure that packages offered properly reflect a person’s duties and
responsibilities and that remuneration is competitive and attracts, retains, and motivates people of the highest quality.
The Managing Director, Executive and Non-executive Directors are remunerated for the services they render to the
Company and such services are carried out under normal commercial terms and conditions. Engagement and payment
for such services are approved by the other Directors who have no interest in the engagement of services.
At the date of this report the Company had not entered into any packages with Directors or senior executives which
include performance based components. The Company does not operate an employee share option plan.
Details of Key Management Personnel
Directors
Michael Delaney Perrott
James Noel Sullivan
Peter Ross Sullivan
Non-executive Chairman
Managing Director
Non-executive Director
Executives
Mark Edward Pitts
Company Secretary
Service Agreements
There are no service agreements with any of the Company’s Directors.
Share Based Compensation
There is currently no provision in the policies of the Group for the provision of share based compensation to Directors.
The interest of Directors in shares and options is set out elsewhere in this report.
Page 34 - GME Resources Ltd - Annual Report 2014
DIRECTORS’ REPORT CONTINUED
Details of Remuneration for Directors
For personal use only
Details of the nature and amount of each element of the emoluments of the key management personnel of the
companies in the Group are:
2014
Short
Term
Benefits
Post
Employment
Benefits
Long
Term
Benefits
Total
Performance
Related
Salary & Fees
$
Superannuation
$
Options
$
$
%
120,000
-
-
120,000
-
30,000
24,000
-
-
30,000
24,000
-
60,000
-
-
60,000
-
234,000
-
-
234,000
-
Short
Term
Benefits
Post
Employment
Benefits
Long
Term
Benefits
Total
Performance
Related
Salary & Fees
$
Superannuation
$
Options
$
$
%
120,000
-
-
120,000
-
30,000
24,000
24,000
-
-
30,000
24,000
24,000
-
60,000
-
-
60,000
-
258,000
-
-
258,000
-
Executive Directors
James N Sullivan
Non-executive Directors
Michael D Perrott
Peter R Sullivan
Executives
Mr Mark Pitts
2013
Executive Directors
James N Sullivan
Non-executive Directors
Michael D Perrott
Geoffrey M Motteram*
Peter R Sullivan
Executives
Mr Mark Pitts
*
Resigned 30 June 2013
The Company and its subsidiaries had no employees as at 30 June 2014.
Directors’ and Executives’ Interests
The relevant interests of Directors either directly or through entities controlled by the Directors in the share capital of
the Company as at the date of this report are:
2014
Director
Ordinary Shares
Opening Balance
Net Change
Ordinary Shares
Closing Balance
Michael D Perrott
18,265,922
-
18,265,922
James N Sullivan
19,615,583
3,914,115
23,529,698
Peter R Sullivan
25,091,575
5,018,313
30,109,888
Ordinary Shares
Opening Balance
Net Change
Ordinary Shares
Closing Balance
Michael D Perrott
15,656,505
2,609,417
18,265,922
James N Sullivan
16,813,359
2,802,224
19,615,583
Peter R Sullivan
16,411,593
8,679,982
25,091,575
6,180,592
1,030,098
7,210,690
2013
Director
Geoffrey M Motteram
Page 35 - GME Resources Ltd - Annual Report 2014
DIRECTORS’ REPORT CONTINUED
During the year, the consolidated entity paid $17,486 (2013:$13,801) for commercial rent of a property owned by the
Leonora Property Syndicate, an entity in which Peter Sullivan and James Sullivan have an interest.
The balance owed to the Leonora Property Syndicate as at 30 June 2014 was $4,290 (2013: nil).
For personal use only
During the year, $6,273 (2013: $46,143) was paid to Kumarina Resources Pty Ltd (an entity of which Peter Sullivan and
James Sullivan are Directors) for shared premises lease and administrative salaries. $1,800 (2013: 8,844) was also paid
to Kumarina for exploration services, and $5,824 (2013: 15,700) was received from Kumarina for shared administrative
salaries. The Company also received $4,991 (2013: nil) from Kumarina Resources Pty Ltd for exploration expenses
incurred on their behalf.
The Company has a payable of $121 (2013: nil) to Kumarina Resources Pty Ltd as at 30 June 2014.
In addition to the fees paid to Mark Pitts for Company Secretarial Services, the Company also paid $15,199 (2013: Nil)
to Endeavour Corporate Pty Ltd, of which Mark Pitts is a partner, for Accounting and bookkeeping services.
The Company has an amount payable of $6,674 (2013: nil) to Endeavour Corporate as at 30 June 2014.
The Company has an amount payable of $24,000 (2013: $26,400) to Hardrock Capital Pty Ltd in relation to Directors fees,
a company of which Peter Sullivan is a director.
Loans to Directors and Executives
There were no loans entered into with Directors or executives during the financial year under review.
Related party transactions with Directors and executives are set out in Note 14 to the Financial Report.
END OF REMUNERATION REPORT
MEETINGS OF DIRECTORS
During the year, 3 meetings of directors were held. Attendances were:
Number Eligible to Attend
Number Attended
3
3
Michael D Perrott
James N Sullivan
3
3
Peter R Sullivan
3
3
OPTIONS
At the date of this report there were no options on issue.
There were no shares issued during the year or since the end of the year upon exercise of options.
AUDIT COMMITTEE
The Board reviews the performance of the external auditors on an annual basis and meets with them during the year to
review findings and assist with Board recommendations.
The Board does not have a separate audit committee with a composition as suggested in the best practice
recommendations. The full Board carries out the function of an audit committee.
The Board believes that the Company is not of a sufficient size to warrant a separate committee and that the full board
is able to meet objectives of the best practice recommendations and discharge its duties in this area.
INDEMNIFYING OFFICERS OR AUDITORS
The Company has not, during or since the financial year, in respect of any person who is or has been an officer or the
auditor of the Company or of a related body corporate, indemnified or made any relative agreement for indemnifying
against a liability incurred as an officer or auditor, including costs and expenses in defending legal proceedings.
ENVIRONMENTAL REGULATION
The Group’s exploration and mining tenements are located in Western Australia. There are significant regulations under
the Western Australian Mining Act 1978 and the Environmental Protection Acts that apply. Licence requirements relating
to ground disturbance, rehabilitation and waste disposal exist for all tenements held.
The Directors are not aware of any significant breaches during the period covered by this report.
Page 36 - GME Resources Ltd - Annual Report 2014
DIRECTORS’ REPORT CONTINUED
NON-AUDIT SERVICES
For personal use only
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are
outlined in Note 11 to the financial statements. The Directors are satisfied that the provision of non-audit services is
compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services do not compromise the auditor’s independence as all non-audit
services have been reviewed to ensure that they do not impact the impartiality and objectivity of the auditor and none
of the services undermine the general principles relating to auditor independence as set out in Code of Conduct APES
110 Code of Ethics for Professional Accountants issued by the Accounting Professional & Ethical Standards Board.
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the directors of the Company
with an Independence Declaration in relation to the audit of the annual report. This Independence Declaration is set out
on the following page and forms part of this directors’ report for the year ended 30 June 2014.
This report is signed in accordance with a Resolution of Directors.
James Sullivan
Managing Director
Perth, Western Australia
11th September 2014
Page 37 - GME Resources Ltd - Annual Report 2014
For personal use only
GME RESOURCES LTD
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of GME Resources Limited
for the year ended 30 June 2014, I declare that to the best of my knowledge and belief,
there have been no contraventions of:
a) the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
b) any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
11 September 2014
N G Neill
Partner
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533.
Email: [email protected]. Website: http://www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of
International, a worldwide organisation of accounting firms and business advisers.
Page 38 - GME Resources Ltd - Annual Report 2014
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
For personal use only
For the year ended 30 June 2014
Note
Other income
2
Depreciation expense
5
Exploration expenditure written off
6
Management and consulting fees
Administration expenses
2
Loss before income tax benefit
Income tax benefit
3
CONSOLIDATED
2014
2013
$
$
312,913
(1,417)
-
33,602
(4,087)
(729,855)
(90,032)
(70,000)
(250,087)
(242,248)
(28,623)
(1,012,588)
481,255
73,394
Net profit/(loss) for the year
452,632
(939,194)
Other comprehensive income
-
Total comprehensive profit/(loss) for the year
Basic profit/(loss) per share
Diluted profit/(loss) per share
13
-
452,632
(939,194)
Cents
Cents
0.12
(0.26)
0.12
(0.26)
The accompanying notes form part of this financial statement.
Page 39 - GME Resources Ltd - Annual Report 2014
Consolidated Statement of Financial Position
For personal use only
As at 30 June 2014
Note
CONSOLIDATED
2014
2013
$
$
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
10(b)
1,543,752
761,847
4
29,773
14,849
47,669
-
1,621,194
776,696
Prepayments
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
4
14,000
183,000
Plant and equipment
5
2,700
4,117
Deferred exploration and evaluation expenditure
6
33,594,943
32,347,488
TOTAL NON-CURRENT ASSETS
33,611,643
32,534,605
TOTAL ASSETS
35,232,837
33,311,301
169,786
77,911
TOTAL CURRENT LIABILITIES
169,786
77,911
TOTAL LIABILITIES
169,786
77,911
35,063,051
33,233,390
CURRENT LIABILITIES
Trade and other payables
7
NET ASSETS
EQUITY
Issued capital
8
52,557,101
51,180,072
Option reserve
8
973,537
973,537
Accumulated losses
TOTAL EQUITY
The accompanying notes form part of this financial statement.
Page 40 - GME Resources Ltd - Annual Report 2014
(18,467,587)
(18,920,219)
35,063,051
33,233,390
Consolidated Statement of Changes in Equity
For the year ended 30 June 2014
For personal use only
CONSOLIDATED
Note
Balance at 30 June 2012
Issued
Capital
$
Option
Reserve
$
50,111,454
973,537
(17,981,025)
33,103,966
-
-
(939,194)
(939,194)
(939,194)
(939,194)
1,068,618
51,180,072
973,537
(18,920,219)
1,068,618
33,233,390
-
-
452,632
452,632
452,632
452,632
1,377,029
52,557,101
973,537
(18,467,587)
1,377,029
35,063,051
Loss for the year
Total comprehensive loss for the year
Transaction with owners
in their capacity as owners
Shares issued (net of costs)
Balance at 30 June 2013
8
Profit for the year
Total comprehensive profit for the year
Transaction with owners
in their capacity as owners
Shares issued (net of costs)
Balance at 30 June 2014
8
Accumulated
Losses
$
Total
$
The accompanying notes form part of this financial statement.
Page 41 - GME Resources Ltd - Annual Report 2014
Consolidated Statement of Cash Flows
For the year ended 30 June 2014
For personal use only
Note
CONSOLIDATED
2014
2013
$
$
Cash flows from operating activities
Payments to suppliers and employees
Payments for exploration and evaluation
Interest received
Research and development tax offset
Other income – Proceeds from royalty and facilitation fee
Net cash outflow from operating activities
(339,578)
(312,224)
(1,219,818)
(966,994)
14,017
31,048
481,255
73,394
300,000
10(a)
(764,124)
(1,174,776)
Cash flows from investing activities
Proceeds from sale of assets
-
1,450
Environmental bonds returned
169,000
-
Net cash inflow from investing activities
169,000
1,450
1,389,357
1,078,700
Cash flows from financing activities
Proceeds from issue of shares
Payment of costs associated with issue of shares
(12,328)
Net cash inflow from financing activities
1,377,029
(10,082)
1,068,618
Net increase/(decrease) in cash and cash equivalents
781,905
(104,708)
Cash and cash equivalents held at the start of the year
761,847
866,555
1,543,752
761,847
Cash and cash equivalents held at the end of the year
The accompanying notes form part of this financial statement.
Page 42 - GME Resources Ltd - Annual Report 2014
10(b)
Notes to the Financial Statements
For personal use only
For the year ended 30 June 2013
1.
STATEMENT OF ACCOUNTING POLICIES
GME Resources Limited (the “Company”) is a listed public Company, incorporated and domiciled in Australia. The
consolidated financial statements of the Company for the financial year ended 30 June 2014 comprise the Company and
its subsidiaries (together referred to as the “Group”).
(a) Basis of preparation
The financial statements are general-purpose financial statements, which have been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards and Interpretations and comply with other
requirements of the law. The financial statements have also been prepared on a historical cost basis.
The accounting policies detailed below have been consistently applied to all of the years presented unless otherwise
stated.
The financial statements are presented in Australian dollars.
The Group’s principal activities are mineral exploration and investment.
(b) Adoption of new and revised standards
In the year ended 30 June 2014, the Directors have reviewed all of the new and revised Standards and Interpretations
issued by the AASB that are relevant to the Group’s operations and effective for the current annual reporting period.
It has been determined by the Directors that there is no impact, material or otherwise, of the new and revised Standards
and Interpretations on the Group’s business and, therefore, no change is necessary to Group accounting policies.
The Directors have also reviewed all new Standards and Interpretations that have been issued but are not yet effective
for the year ended 30 June 2014. As a result of this review the Directors have determined that there is no impact,
material or otherwise, of the new and revised Standards and Interpretations on the Group’s business and, therefore, no
changes are necessary to Group accounting policies.
(c) Critical accounting judgements and key estimates
The preparation of financial statements requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual
results may differ from these estimates.
The recoverability of the carrying amount of exploration and evaluation costs carried forward has been reviewed by the
Directors. In conducting the review, the recoverable amount of the Group’s deferred exploration and evaluation
expenditure of $31,452,816 relating to the NiWest nickel laterite project has been assessed by reference to the higher
of “fair value less costs to sell” and “value in use”.
In determining value in use, future cash flows are based on:
•
Estimates of ore reserves and mineral resources for which there is a high degree of confidence of economic
extraction.
•
Estimated production and sales levels.
•
Estimated future commodity prices.
•
Future costs of production.
•
Future capital expenditure.
•
Future exchange rates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised in the period in
which the estimate is revised if it affects only that period, or in the period of the revision and future periods if the
revision affects both current and future periods.
The cashflow model used to support the assessment is calculated over a period of 20 years, being the estimated life of
the mine. The discount rate is 8% and for the purpose of this exercise, a future nickel a price of US$10/lb has been
assumed with a long term AUD/USD exchange rate of $0.85.
Page 43 - GME Resources Ltd - Annual Report 2014
NOTE 1 STATEMENT OF ACCOUNTING POLICIES CONTINUED
(c) Critical accounting judgements and key estimates (continued)
A scoping study completed in December 2013 concluded that a heap leaching operation combined with a processing plant
utilising Direct Solvent Extraction to upgrade purified nickel solutions from the heap leach to produce LME nickel
cathode via electrowinning is technologically and potentially economically sound.
For personal use only
Refer to ASX Announcement dated 11 December 2013 for more details on the scoping study.
Variations to expected future cash flows, and timing thereof, could result in significant changes to the impairment test
results, which in turn could impact future financial results.
The accounting policies and methods of computation adopted in the preparation of the financial statements are
consistent with those adopted and disclosed in the Company’s financial statements for the financial year ended 30 June
2013.
(d) Going concern
The financial report has been prepared on the going concern basis, which contemplates the continuity of normal business
activity and the realisation of assets and the settlement of liabilities in the normal course of business.
As disclosed in the financial statements, the Group recorded an operating profit of $452,632 and a cash outflow from
operating activities of $764,124 for the year ended 30 June 2014 and at balance date, had net current assets of
$1,451,408.
The Board considers that the consolidated entity is a going concern and recognises that additional funding is required
to ensure that the consolidated entity can continue to fund its operations and further develop its mineral exploration
and evaluation assets during the twelve month period from the date of this financial report. Such additional funding can
be derived from sources including:
•
The placement of securities under the ASX Listing Rule 7.1 or otherwise;
•
An excluded offer pursuant to the Corporations Act 2001; or
•
The sale of assets.
The financial report has been prepared on the going concern basis, which contemplates the continuity of normal business
activity and the realisation of assets and the settlement of liabilities in the normal course of business.
Accordingly, the Directors believe that subject to prevailing equity market conditions, the consolidated entity will obtain
sufficient funding to enable it to continue as a going concern and that it is appropriate to adopt that basis of accounting
in the preparation of the financial report. Should the consolidated entity be unable to obtain sufficient funding as
outlined above, there is a material uncertainty that may cause significant doubt as to whether or not the consolidated
entity will be able to continue as a going concern and therefore, whether it will realise its assets and extinguish its
liabilities in the normal course of business and at the amounts stated in the financial report.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded
asset amounts or to the amounts and classification of liabilities that might be necessary should the consolidated entity
not continue as a going concern.
(e)
Statement of compliance
The financial statements were authorised for issue on 11th September 2014.
The financial statements comply with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial statements,
comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS).
(f) Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by
the Company. Control is achieved when the Company:
•
has power over the investee;
•
is exposed, or has rights, to variable returns from its involvement in with the investee; and
•
has the ability to its power to affect its returns.
The Company reassess whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements listed above.
Page 44 - GME Resources Ltd - Annual Report 2014
NOTE 1 STATEMENT OF ACCOUNTING POLICIES CONTINUED
For personal use only
(f) Basis of consolidation (continued)
When the Company has less than a majority of the voting rights if an investee, it has the power over the investee when
the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally.
The Company considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights are
sufficient to give it power, including;
•
the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote
holders;
•
potential voting rights held by the Company, other vote holders or other parties; rights arising from other
contractual arrangements; and
•
any additional facts and circumstances that indicate that the Company has, or does not have, the current ability
to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous
shareholder meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company
loses control of the subsidiary. Specifically income and expenses of a subsidiary acquired or disposed of during the year
are included in the consolidated statement of comprehensive income from the date the Company gains control until the
date when the Company ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to
the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company
and to the non-controlling interests even if this results in the controlling interest having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in
line with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members
are eliminated in full on consolidation.
Changes in the Group’s ownership interest in existing subsidiaries
Changes in the Group’s ownership interest in subsidiaries that do not result in the Group losing control over the
subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the noncontrolling interests are adjusted to reflect the changes in their relative interests in subsidiaries. Any difference
between the amount paid by which the non-controlling interests are adjusted and the fair value of the consideration
paid or received is recognised directly in equity and attributed to the owners of the Company.
When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated as the
difference between:
•
The aggregate of the fair value of the consideration received and the fair value of any retained interest; and
•
The previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any noncontrolling interests.
All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if
the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit and loss
or transferred to another category of equity as specified/permitted by the applicable AASBs). The fair value of any
investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial
recognition for subsequent accounting under AASB 139, when applicable, the cost on initial recognition of an investment
in an associate or a joint venture.
(g) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue
can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
Interest income
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial
asset.
Page 45 - GME Resources Ltd - Annual Report 2014
NOTE 1 STATEMENT OF ACCOUNTING POLICIES CONTINUED
(g) Revenue recognition (continued)
Royalty income
For personal use only
Revenue from royalties is measured at the fair value of the consideration received and receivable. Revenue is recognised
when the significant risk and rewards of ownership have been transferred, recovery of the consideration is probable and
the amount of revenue can be measured reliably.
Facilitation fee
Revenue from facilitation fees is measured at the fair value of the consideration received and receivable. Revenue is
recognised when the significant risk and rewards of ownership have been transferred, recovery of the consideration is
probable and the amount of revenue can be measured reliably.
(h)
Borrowing costs
Borrowing costs are recognised as an expense when incurred except those that relate to the acquisition, construction or
production of qualifying assets where the borrowing cost is added to the cost of those assets until such time as the assets
are substantially ready for their intended use or sale.
(i) Cash and cash equivalents
Cash and short-term deposits in the Consolidated Statement of Financial Position comprise cash at bank and on hand.
Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding bank overdrafts.
(j) Trade and other receivables
Trade receivables, which generally have 30-90 day terms, are recognised and carried at original invoice amount less an
allowance for any uncollectible amounts. An allowance for doubtful debts is made when there is objective evidence that
the Group will not be able to collect the debts. Bad debts are written off when identified.
(k) Income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are
enacted or substantively enacted by the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
•
when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
•
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in
joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that
the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:
•
when the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; or
•
when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in
joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the
temporary difference will reverse in the foreseeable future and taxable profit will be available against which the
temporary difference can be utilised.
Page 46 - GME Resources Ltd - Annual Report 2014
NOTE 1 STATEMENT OF ACCOUNTING POLICIES CONTINUED
For personal use only
(k) Income tax (continued)
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset
to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it
has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the
same taxation authority.
Tax consolidation legislation
GME Resources Limited and its 100% owned Australian resident subsidiaries have implemented the tax consolidation
legislation. Current and deferred tax amounts are accounted for in each individual entity as if each entity continued to
act as a taxpayer on its own. GME Resources Limited recognises both its own current and deferred tax amounts and those
current tax liabilities, current tax assets and deferred tax assets arising from unused tax credits and unused tax losses
which it has assumed from its controlled entities within the tax consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
payable or receivable from or payable to other entities in the Group. Any difference between the amounts receivable
or payable under the tax funding agreement are recognised as a contribution to (or distribution from) controlled entities
in the tax consolidated group.
(l) Other taxes
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is
not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense. Receivables and payables in the Consolidated Statement
of Financial Position are shown inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the Consolidated Statement of Financial Position.
(m) Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such cost
includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred.
Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant and
equipment as a replacement only if it is eligible for capitalisation.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
Plant and equipment – 4 to 5 years.
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each
financial year end.
(i) Impairment
The carrying values of plant and equipment are reviewed for impairment at each reporting date, with recoverable
amount being estimated when events or changes in circumstances indicate that the carrying value may be
impaired.
The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset.
Page 47 - GME Resources Ltd - Annual Report 2014
NOTE 1 STATEMENT OF ACCOUNTING POLICIES CONTINUED
For personal use only
(m) Plant and equipment (continued)
For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the
cash-generating unit to which the asset belongs, unless the asset's value in use can be estimated to be close to its
fair value.
An impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated
recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount.
For plant and equipment, impairment losses are recognised in the Consolidated Statement of Comprehensive
Income.
(ii) Derecognition and disposal
An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are
expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
(n) Investments and other financial assets
Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either
financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or availablefor-sale investments, as appropriate. When financial assets are recognised initially, they are measured at fair value,
plus, in the case of investments not at fair value through profit or loss, directly attributable transactions costs. The
Group determines the classification of its financial assets after initial recognition and, when allowed and appropriate,
re-evaluates this designation at each financial year-end.
All regular way purchases and sales of financial assets are recognised on the trade date i.e. the date that the Group
commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts
that require delivery of the assets within the period established generally by regulation or convention in the
marketplace.
(i) Financial assets at fair value through profit or loss
Financial assets classified as held for trading are included in the category ‘financial assets at fair value through
profit or loss’. Financial assets are classified as held for trading if they are acquired for the purpose of selling in
the near term. Derivatives are also classified as held for trading unless they are designated as effective hedging
instruments. Gains or losses on investments held for trading are recognised in profit or loss.
(ii) Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-tomaturity when the Group has the positive intention and ability to hold to maturity. Investments intended to be
held for an undefined period are not included in this classification. Investments that are intended to be held-tomaturity, such as bonds, are subsequently measured at amortised cost. This cost is computed as the amount
initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective
interest method of any difference between the initially recognised amount and the maturity amount. This
calculation includes all fees and points paid or received between parties to the contract that are an integral part
of the effective interest rate, transaction costs and all other premiums and discounts. For investments carried at
amortised cost, gains and losses are recognised in profit or loss when the investments are derecognised or
impaired, as well as through the amortisation process.
(iii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses
are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through
the amortisation process.
Page 48 - GME Resources Ltd - Annual Report 2014
NOTE 1 STATEMENT OF ACCOUNTING POLICIES CONTINUED
For personal use only
(n)
Investments and other financial assets (continued)
(iv) Available-for-sale investments
Available-for-sale investments are those non-derivative financial assets that are designated as available-for-sale or
are not classified as any of the three preceding categories. After initial recognition available-for sale investments
are measured at fair value with gains or losses being recognised as a separate component of equity until the
investment is derecognised or until the investment is determined to be impaired, at which time the cumulative
gain or loss previously reported in equity is recognised in profit or loss.
The fair value of investments that are actively traded in organised financial markets is determined by reference
to quoted market bid prices at the close of business on the balance date. For investments with no active market,
fair value is determined using valuation techniques. Such techniques include using recent arm’s length market
transactions; reference to the current market value of another instrument that is substantially the same;
discounted cash flow analysis and option pricing models.
(o) Exploration and evaluation expenditure
Exploration and evaluation costs, including the costs of acquiring licences, are capitalised as exploration and evaluation
assets on an area of interest basis. Costs incurred before the Group has obtained the legal rights to explore an area are
recognised in the Consolidated Statement profit or loss and other comprehensive Income.
Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either:
•
the expenditures are expected to be recouped through successful development and exploitation of the area of
interest; or
•
activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves and active and significant
operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if:
•
sufficient data exists to determine technical feasibility and commercial viability; and
•
facts and circumstances suggest that the carrying amount exceeds the recoverable amount (see impairment
accounting policy 1(p)).
For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to
which the exploration activity relates. The cash generating unit shall not be larger than the area of interest.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are
demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and
then reclassified to mining property and development assets within property, plant and equipment.
(p) Impairment of tangible and intangible assets other than goodwill
The Group assesses at each balance date whether there is an indication that an asset may be impaired. If any such
indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s
recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use
and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent
of those from other assets or groups of assets and the asset’s value in use cannot be estimated to be close to its fair
value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the
carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit
is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment
losses relating to continuing operations are recognised in those expense categories consistent with the function of the
impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a
revaluation decrease).
An assessment is also made at each balance date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is
estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimate used to
determine the assets recoverable amount since the last impairment loss was recognised.
Page 49 - GME Resources Ltd - Annual Report 2014
NOTE 1 STATEMENT OF ACCOUNTING POLICIES CONTINUED
For personal use only
(p) Impairment of tangible and intangible assets other than goodwill (continued)
If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot
exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been
recognised for the asset in previous years. Such reversal is recognised in profit or loss unless the asset is carried at
revalued amount, in which case the reversal is treated as a revaluation increase. After such reversal the depreciation
charge is adjusted in future periods to allocate the assets revised carrying amount, less any residual value, on a
systematic basis over its remaining useful life.
(q) Impairment of financial assets
The Group assesses at each balance date whether a financial asset or Group of financial assets is impaired.
Financial assets carried at amortised cost
If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been
incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present
value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the
financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition). The
carrying amount of the asset is reduced either directly or through use of an allowance account. The amount of the loss
is recognised in profit or loss.
The Group first assesses whether objective evidence of impairment exists individually for financial assets that are
individually significant, and individually or collectively for financial assets that are not individually significant. If it is
determined that no objective evidence of impairment exists for an individually assessed financial asset, whether
significant or not, the asset is included in a Group of financial assets with similar credit risk characteristics and that
Group of financial assets is collectively assessed for impairment. Assets that are individually assessed for impairment
and for which an impairment loss is or continues to be recognised are not included in a collective assessment of
impairment.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to
an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any
subsequent reversal of an impairment loss is recognised in profit or loss, to the extent that the carrying value of the
asset does not exceed its amortised cost at the reversal date.
Financial assets carried at cost
If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not
carried at fair value (because its fair value cannot be reliably measured), or on a derivative asset that is linked to and
must be settled by delivery of such an unquoted equity instrument, the amount of the loss is measured as the difference
between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the current
market rate of return for a similar financial asset. Such impairment loss shall not be reversed in subsequent periods.
(r) Trade and other payables
Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services
provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged
to make future payments in respect of the purchase of these goods and services. Trade and other payables are presented
as current liabilities unless payment is not due within 12 months.
(s) Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the proceeds.
(t) Earnings per share
Basic EPS is calculated as net result attributable to members, adjusted to exclude costs of servicing equity (other than
dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any
bonus element.
•
the after tax effect of dividends and interest associated with potential dilutive ordinary shares that have been
recognised as expenses; and
•
other non discretionary changes in revenues or expenses during the period that would result from the dilution of
potential ordinary shares; divided by the weighted average number of ordinary shares and potential dilutive
ordinary shares, adjusted for any bonus element.
Page 50 - GME Resources Ltd - Annual Report 2014
NOTE 1 STATEMENT OF ACCOUNTING POLICIES CONTINUED
For personal use only
(u) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of Directors of GME Resources Limited.
(v) Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards
of ownership to the lessee. All other leases are classified as operating leases.
Operating lease payments are recognised as an expense on a straight line basis over the lease term, except where
another systematic basis is more representative of the time pattern in which economic benefits from the leased asset
are consumed.
(w) Parent entity financial information
The financial information for the parent entity, disclosed in Note 19 has been prepared on the same basis as the
consolidated financial statements.
Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the parent entity’s financial
statements. Dividends received from associates are recognised in the parent entity’s profit or loss, rather than being
deducted from the carrying amount of these investments.
CONSOLIDATED
2014
2013
$
$
2.
REVENUE AND EXPENSES
Operating Activities
(a)
Revenue:
Interest received
12,913
32,152
-
1,450
Facilitation fee for prospecting rights
200,000
-
Royalty Income
100,000
-
Total revenue
312,913
33,602
Audit and taxation compliance fees
43,745
36,825
Corporate compliance costs
32,422
53,005
-
18,281
Insurance
23,011
12,155
Office costs
37,917
77,911
Research & development claim preparation
71,625
-
Other
41,367
44,071
250,087
242,248
Profit on sale of assets
(b)
Expenses:
Administration costs:
Employee expenses
Page 51 - GME Resources Ltd - Annual Report 2014
CONSOLIDATED
2014
2013
$
$
INCOME TAX
(a)
Income tax recognised in profit and loss
For personal use only
3.
The major components of tax expense are:
Adjustments recognised in the current year in
relation to the current tax – R&D tax offset
481,255
73,394
Total tax benefit
481,255
73,394
The prima facie income tax expense on pre-tax accounting result from operations reconciles to the income tax
provided in the financial statements as follows:
Accounting loss before tax from continuing operations
Income tax expense/(benefit) calculated at 30%
Non-deductible expenses
R&D tax incentive
Tax losses and deferred tax balances not recognised
Income tax benefit reported in the Consolidated Statement
of Profit or Loss and Other Comprehensive Income.
(b)
(28,623)
(1,012,588)
(8,587)
(303,777)
1,601
196
481,255
73,394
6,986
303,581
481,255
73,394
11,650,587
11,567,444
20,937
23,517
11,671,524
11,590,961
10,078,483
9,704,247
14,300
331
10,092,783
9,704,578
3,699
3,024
Unrecognised deferred tax balances
Deferred tax assets comprise:
Tax losses carried forward
Other deferred tax balances
Deferred tax liabilities comprise:
Exploration expenditure capitalised
Other deferred tax balances
Income tax benefit not recognised directly in equity during the year:
Capital raising costs
Potential deferred tax assets attributable to tax losses and capital losses carried forward have not been brought to
account because the Directors do not believe it is appropriate to regard realisation of the future tax benefit as
probable.
Tax Consolidation
Effective 1 July 2003, for the purposes of income taxation, the Company and its 100% wholly owned subsidiaries
formed a tax consolidated group. The head entity of the tax consolidated group is GME Resources Limited.
Page 52 - GME Resources Ltd - Annual Report 2014
For personal use only
CONSOLIDATED
2014
2013
$
$
4.
TRADE AND OTHER RECEIVABLES
Current
Accrued interest
-
1,104
29,062
13,745
711
-
29,773
14,849
14,000
183,000
Plant and equipment - at cost
740,666
740,666
Less accumulated depreciation
(737,966)
(736,549)
GST Refundable
Other
Non-current
Bonds
5.
PLANT AND EQUIPMENT (NON-CURRENT)
Total plant and equipment
2,700
4,117
4,117
8,204
Additions
-
-
Disposals
-
-
Reconciliation of the carrying amount of plant and equipment:
Carrying amount at the beginning of the year
Depreciation
(1,417)
(4,087)
2,700
4,117
32,347,488
32,104,931
Carrying amount at the end of the year
6.
DEFERRED EXPLORATION AND EVALUATION EXPENDITURE (NON-CURRENT)
Exploration and evaluation phase - at cost
Movements:
Balance at beginning of the year
Direct expenditure
1,247,455
972,412
33,594,943
33,077,343
Less expenditure written off
33,594,943
(729,855)
32,347,488
The ultimate recoupment of the above deferred exploration and evaluation expenditure is dependent on the
successful development and commercial exploitation or, alternatively, sale of the respective areas at amounts
sufficient to recover the investment.
The write-off of expenditure arising in the prior year was based on tenements relinquished, and the evaluation of the
carrying values of the remaining tenements.
7.
PAYABLES (CURRENT)
Trade payables and accruals
169,786
77,911
169,786
77,911
Trade payables and accruals are non-interest bearing and normally settled on 30 day terms.
Details of exposure to interest rate risk and fair value in respect of liabilities are set out in Note 15. There are no
secured liabilities as at 30 June 2014.
Page 53 - GME Resources Ltd - Annual Report 2014
CONSOLIDATED
2014
2013
$
$
For personal use only
8.
ISSUED CAPITAL AND RESERVES
436,121,505 (2013: 384,663,864) ordinary shares, fully paid
52,557,101
51,180,072
51,180,072
50,111,454
1,389,357
-
-
1,078,700
Ordinary shares
Balance at the beginning of the year
Entitlement issue (a)
Entitlement issue
Costs associated with entitlement issue
(12,328)
Balance at the end of the year
Balance at the beginning of the year
Entitlement issue (a)
Entitlement issue
Balance at the end of the year
(10,082)
52,557,101
51,180,072
No of
Shares
No of
Shares
384,663,864
343,175,391
51,457,641
-
-
41,488,473
436,121,505
384,663,864
(a) In June 2014, 51,457,641 ordinary shares were issued under a non-renounceable rights issue at 2.7c per share.
Reserves
The option reserve is used to record the fair value of options issued and there have been no further issues of options
during the year.
9.
CONTROLLED ENTITIES
Name of Controlled Entity
(Country of Incorporation)
Percentage
Owned
2014
%
2013
%
Company’s Cost of
Investment
2014
2013
$
$
GME Sulphur Inc (USA)
100
100
-
-
GME Investments Pty Ltd (Australia)
100
100
-
-
Golden Cliffs NL (Australia)
100
100
616,893
616,893
NiWest Limited (Australia)
100
100
4,561,313
4,561,313
5,178,206
5,178,206
Page 54 - GME Resources Ltd - Annual Report 2014
For personal use only
CONSOLIDATED
2014
2013
$
$
10. CONSOLIDATED STATEMENT OF CASH FLOWS
(a)
Reconciliation of cash flows from operating activities
Profit/(loss) from ordinary activities after tax
452,632
Depreciation / amortisation
(939,194)
1,417
Gain on sale of assets
-
Exploration costs written off
-
Tenement reversion account written off
4,087
(1,450)
729,855
-
Exploration costs capitalised (excluding creditors)
Decrease/(increase) in receivables and prepayments
Increase/(decrease) in sundry creditors
Net cash outflows from operating activities
7,026
(1,265,622)
(966,944)
(46,564)
(1,106)
94,013
(7,000)
(764,124)
(1,174,776)
(b) Reconciliation of cash and cash equivalents
Cash balance comprises:
Cash at bank
Deposits at call
176,466
10,384
1,367,286
751,463
1,543,752
761,847
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short term deposits are made for varying periods between 3 to 6 months depending on the immediate cash
requirements of the Group, and earn interest at the respective short-term deposit rates.
11. AUDITOR’S REMUNERATION
Amounts received or due and receivable by the auditors of GME Resources Ltd for:
-
an audit or review of the financial statements of the Company
and any other entity in the Group
other services in relation to the Company and any other entity in the Group
38,295
35,425
5,450
1,400
43,745
36,825
12. SEGMENT REPORTING
The Group has adopted AASB 8 Operating Segments which requires operating segments to be identified on the basis of
internal reports about components of the Group that are reviewed by the chief operating decision maker, being the
Board of GME Resources Limited, in order to allocate resources to the segment and assess its performance. The
Board of GME Resources Limited reviews internal reports prepared as consolidated financial statements and strategic
decisions of the Group are determined upon analysis of these internal reports. During the period, the Group operated
predominantly in one business and geographical segment being the resources sector in Australia. Accordingly, under
the ‘management approach’ outlined only one operating segment has been identified and no further disclosure is
required in the notes to the consolidated financial statements.
Page 55 - GME Resources Ltd - Annual Report 2014
CONSOLIDATED
2014
2013
$
$
For personal use only
13. PROFIT/(LOSS) PER SHARE
Cents
Cents
0.12
(0.26)
Basic and diluted Profit/(loss) per share
Profit/(loss) used in calculation of basic and diluted earnings per share
Weighted average number of ordinary shares outstanding during the year
used in calculation of basic and diluted earnings per share
452,632
(939,194)
385,227,783
359,316,112
234,000
258,000
-
-
The Company does not have any options on issue.
14. DIRECTORS’ AND EXECUTIVES’ DISCLOSURES
(a)
(b)
Details of Key Management Personnel
Directors
Michael Delaney Perrott – Non-executive Chairman
James Noel Sullivan – Managing Director
Peter Ross Sullivan – Non-executive Director
Executives
Mark Pitts – Company Secretary
Key Management Personnel Compensation
Short-term employee benefits
Post-employment benefits
Long-term employee benefits
(c)
-
-
234,000
258,000
Other transactions and balances with Key Management Personnel
There were no other transactions with key management personnel during this financial year.
15. FINANCIAL INSTRUMENT DISCLOSURES
Financial risk management objectives
The Group is exposed to market risk (including interest rate), credit risk and liquidity risk.
The Group does not issue derivative financial instruments, nor does it believe that it has exposure to such trading or
speculative holdings through its investments in associates.
Risk management is carried out by the Board as a whole, which provides the principles for overall risk management, as
well as policies covering specific areas such as foreign exchange risk, interest rate risk, and liquidity risk. The Group
uses different methods to measure different types of risk to which it is exposed. Where appropriate these methods will
include sensitivity analysis in the case of interest rate, and other price risks and aging analysis for credit risk.
Page 56 - GME Resources Ltd - Annual Report 2014
NOTE 15 FINANCIAL INSTRUMENT DISCLOSURES CONTINUED
(a)
Categories of financial instruments
Fixed Interest Rate Maturing
For personal use only
2014
Financial Assets
Weighted
Floating
Average
Interest Rate
Effective Interest Rate
$
Within 1
year
$
Over 1
year
$
Non-interest
Bearing
$
Total
$
Cash assets
2.1%
176,466
1,381,286
-
-
1,557,752
Receivables
n/a
Payables
n/a
176,466
-
1,381,286
-
-
29,773
29,773
169,786
169,786
29,773
1,587,525
169,786
169,786
Fixed Interest Rate Maturing
2013
Financial Assets
Weighted
Floating
Average
Interest Rate
Effective Interest Rate
$
Within 1
year
$
Over 1
year
$
Non-interest
Bearing
$
Total
$
Cash assets
3.3%
10,384
934,463
-
-
944,847
Receivables
n/a
Payables
n/a
10,384
-
934,463
-
-
14,849
14,849
77,911
77,911
14,849
959,696
77,9118
77,911
(b)
Interest rate risk sensitivity analysis
The Company and the Group are exposed to interest rate risk, which is the risk that a financial instrument’s value will
fluctuate as a result of changes in market interest rates, in respect of the cash balances and deposits.
The sensitivity analyses below have been determined based on the exposure to interest rates for instruments at the
reporting date and the stipulated change taking place at the beginning of the financial year and held constant
throughout the reporting period. A 50 basis point increase or decrease is used when reporting interest rate risk
internally to key management personnel and represents management’s assessment of the change in interest rates.
At reporting date, if interest rates had been 50 basis points higher and all other variables were held constant, the
Group’s net profit before tax and equity would reduce by $3,091 and increase by $3,091, respectively (2013:$4,248).
A reduction in the interest rate would have an equal but opposite effect.
(c)
Liquidity risk
The Company manages liquidity risk by continually monitoring cash reserves and cash flow forecasts to ensure that
financial commitments can be met as and when they fall due.
(d)
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Group is not significantly exposed to credit risk from its operating activities,
however, the Board does monitor receivables as and when they arise. The maximum exposure to credit risk at the
reporting date is the carrying value of each class of financial asset mentioned above. The Group does not hold
collateral as security.
No material exposure is considered to exist by virtue of the possible non-performance of the counterparties to
financial instruments and cash deposits.
(e)
Capital management risk
The Company controls the capital of the Group in order to maximise the return to shareholders and ensure that the
Group can fund its operations and continue as a going concern.
The Company effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital
structure in response to changes in these risks and the market. These responses include the management of
expenditure and debt levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the Group since the
prior year.
(f)
Net fair values
The net fair value of the financial assets and financial liabilities approximates their carrying value. Other than listed
investments that are measured at the quoted bid price at balance date adjusted for transaction costs expected to be
incurred, no financial assets and financial liabilities are readily traded on organised markets in standardised form.
The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the
Consolidated Statement of Financial Position and in the notes to and forming part of the financial statements.
Page 57 - GME Resources Ltd - Annual Report 2014
16. COMMITMENTS AND CONTINGENT LIABILITIES
There were no capital commitments or contingent liabilities, not provided for in the financial statements of the Group
as at 30 June 2014, other than:
(a)
Mineral Tenement Leases
For personal use only
In order to maintain current rights of tenure to mining tenements, the Group in its own right or in conjunction with
its joint venture partners may be required to outlay amounts of approximately $1,370,880 (2013: $1,888,500) per
annum on an ongoing basis in respect of tenement lease rentals and to meet the minimum expenditure requirements
of the Western Australian and Queensland Mines Department. These obligations are expected to be fulfilled in the
normal course of operations by the Group or its joint venture partners and are subject to variations dependent on
various matters, including the results of exploration on the mineral tenements.
(b)
Claims of Native Title
Legislative developments and judicial decisions (in particular the uncertainty created in the area of Aboriginal land
rights by the High Court decision in the “Mabo” case and native title legislation) may have an adverse impact on the
Group’s exploration and future production activities and its ability to fund those activities. It is impossible at this
stage to quantify the impact (if any) which these developments may have on the Group’s operations.
Native title claims have been made over ground in which the Group currently has an interest. It is possible that
further claims could be made in the future. The Company has established access agreements with the major claimant
groups in the area. All of the mineral resources are located on granted mining leases. Once granted there is no
opportunity for veto of project development under the Native Title act, however owners must adhere to the
provisions of the Aboriginal Heritage Act 1972 which regulates how to deal with specific heritage sites that may exist
on the tenement.
(c)
Non-cancellable Operating Lease Commitments
Within one year
CONSOLIDATED
2014
2013
$
$
4,853
10,681
-
4,853
4,853
15,534
One year or later and no later than five years
17. INTERESTS IN BUSINESS UNDERTAKINGS – FARM-INS
The Company has entered into a number of agreements with other companies to gain interests in project areas.
These interests will be earned by expending certain amounts of money on exploration expenditure within a specific
time. The Company can, however, withdraw from these projects at any time without penalty. The amounts required
to be expended in the next year have been included in Note 16 – Commitments and Contingent Liabilities.
18. RELATED PARTIES
Total amounts receivable and payable from entities in the wholly owned Group at balance date:
Non-current receivables
Loans net of provisions for non- recovery
15,437,092
14,235,410
1,284,011
1,387,360
Current payables
Loans
During the year, the consolidated entity paid $17,486 (2013:$13,801) for commercial rent of a property owned by the
Leonora Property Syndicate, an entity in which Peter Sullivan and James Sullivan have an interest.
The balance owed to the Leonora Property Syndicate as at 30 June 2014 was $4,290 (2013: nil).
During the year, $6,273 (2013: $46,143) was paid to Kumarina Resources Pty Ltd (an entity of which Peter Sullivan and
James Sullivan are Directors) for shared premises lease and administrative salaries. $1,800 (2013: 8,844) was also paid
to Kumarina for exploration services, and $5,824 (2013: 15,700) was received from Kumarina for shared administrative
salaries. The Company also received $4,991 (2013: nil) from Kumarina Resources Pty Ltd for exploration expenses
incurred on their behalf.
The Company has a payable of $121 (2013: nil) to Kumarina Resources Pty Ltd as at 30 June 2014.
Page 58 - GME Resources Ltd - Annual Report 2014
NOTE 18 RELATED PARTIES CONTINUED
In addition to the fees paid to Mark Pitts for Company Secretarial Services, the Company also paid $15,199 (2013: Nil)
to Endeavour Corporate Pty Ltd, of which Mark Pitts is a partner, for Accounting and bookkeeping services.
For personal use only
The Company has an amount payable of $6,674 (2013: nil) to Endeavour Corporate as at 30 June 2014.
The Company has an amount payable of $24,000 (2013: $26,400) to Hardrock Capital Pty Ltd in relation to Directors
fees, a company of which Peter Sullivan is a director.
19. PARENT ENTITY DISCLOSURE
As at, and throughout, the financial year ended 30 June 2014 the parent Company of the Group was GME Resources
Limited.
CONSOLIDATED
2014
2013
$
$
Results of the parent entity
Profit/(loss) after tax for the year
Other comprehensive income
Total comprehensive result for the year
152,629
152,629
(340,835)
(340,835)
Financial position of the parent entity at year end
Current assets
1,621,194
776,696
36,146,407
34,328,221
Current liabilities
1,751,797
1,463,269
Total liabilities
1,751,797
1,463,269
52,557,101
51,180,072
973,537
973,537
Total assets
Total equity of the parent entity comprising of:
Share capital
Option reserve
Accumulated losses
Total equity
(19,136,028)
(19,288,657)
34,394,610
32,864,952
20. SUBSEQUENT EVENTS
No matters or circumstances have arisen since the end of the financial year which significantly affected or may
significantly affect the Group’s operations, the results of those operations or the Group’s state of affairs in future
financial years.
Page 59 - GME Resources Ltd - Annual Report 2014
Directors’ Declaration
In the opinion of the Directors of GME Resources Limited (the “Company”):
a.
The financial statements, notes, and the additional disclosures are in accordance with the Corporations Act 2001
including:
For personal use only
1.
i)
giving a true and fair view of the Consolidated Entity’s financial position as at 30 June 2014 and of its
performance for the year then ended; and
ii)
complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
Corporations Regulations 2001.
b.
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
c.
the financial statements and notes thereto are in accordance with International Financial Reporting Standards
issued by the International Accounting Standards Board.
2.
This declaration has been made after receiving the declarations required to be made to the Directors in accordance
with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2014.
This declaration is signed in accordance with a resolution of the Board of Directors.
James Sullivan
Managing Director
Perth, Western Australia
11th September 2014
Page 60 - GME Resources Ltd - Annual Report 2014
For personal use only
INDEPENDENT AUDITOR’S REPORT
To the members of GME Resources Limited
Report on the Financial Report
We have audited the accompanying financial report of GME Resources Limited (“the company”),
which comprises the consolidated statement of financial position as at 30 June 2014, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, notes
comprising a summary of significant accounting policies and other explanatory information, and the
directors’ declaration for the consolidated entity. The consolidated entity comprises the company and
the entities it controlled at the year’s end or from time to time during the financial year.
Directors’ responsibility for the financial report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that is free from material misstatement, whether due to fraud or error.
In Note 1(e), the directors also state, in accordance with Accounting Standard AASB 101:
Presentation of Financial Statements, that the financial report complies with International Financial
Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the
company’s preparation and fair presentation of the financial report in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors,
as well as evaluating the overall presentation of the financial report.
Our audit did not involve an analysis of the prudence of business decisions made by directors or
management.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533.
Email: [email protected]. Website: http://www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of
International, a worldwide organisation of accounting firms and business advisers.
Page 61 - GME Resources Ltd - Annual Report 2014
For personal use only
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001.
Auditor’s opinion
In our opinion:
(a) the financial report of GME Resources Limited is in accordance with the Corporations Act
2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June
2014 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations
2001; and
(b) the financial report also complies with International Financial Reporting Standards as
disclosed in Note 1(e).
Emphasis of Matter
Without modifying our opinion, we draw attention to Note 1(d) in the financial report, which indicates
that additional funding is required to ensure that the consolidated entity can continue to fund its
operations and further develop its mineral exploration and evaluation assets during the twelve month
period from the date of these financial statements. Should the consolidated entity be unable to obtain
sufficient funding as stated in Note 1(d), there is a material uncertainty that may cause significant
doubt as to whether or not the consolidated entity will be able to continue as a going concern and
therefore, whether it will realise its assets and extinguish its liabilities in the normal course of
business and at the amounts stated in the financial report.
Report on the Remuneration Report
We have audited the remuneration report included in the directors’ report for the year ended 30 June
2014. The directors of the company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance
with Australian Auditing Standards.
Auditor’s opinion
In our opinion the remuneration report of GME Resources Limited for the year ended 30 June 2014
complies with section 300A of the Corporations Act 2001.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
11 September 2014
Page 62 - GME Resources Ltd - Annual Report 2014
N G Neill
Partner
Shareholder Information
For personal use only
The following additional information, applicable at 1 October 2014 is required by the Australian Securities Exchange Ltd
in respect of listed public companies only.
Shareholding
Number of
Holders
89
289
142
499
222
a.
Distribution of Shareholders
1
–
1,000
1,001
–
5,000
5,001
–
10,000
10,001 – 100,000
100,001
and over
TOTAL
1,241
b.
The number of shareholders holding less than a marketable parcel is 716.
c.
The names of the substantial shareholders listed in the holding Company’s register as at 1 October 2014 are:
Shareholder
Number
ICM Limited
167,621,554
MANDALUP INVESTMENTS PTY LTD
39,601,476
PETER ROSS SULLIVAN
21,507,066
JAMES NOEL SULLIVAN
23,529,698
d.
Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary shares
—
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a
meeting or by proxy has one vote on a show of hands.
Page 63 - GME Resources Ltd - Annual Report 2014
e.
20 Largest Shareholders — Ordinary Shares
Name
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
2
% Held of
Issued
Ordinary
Capital
150,142,778
32.53
MANDALUP INVESTMENTS PTY LTD <MANDALUP DISCRETIONARY A/C>
29,421,416
6.37
3
ICM LIMITED
22,053,612
4.78
4
PANORAMIC RESOURCES LIMITED
18,518,519
4.01
5
DUNCRAIG INVESTMENTS SERVICES PTY LTD <PMS SUPER - PERROTT A/C>
18,265,922
3.96
6
HARDROCK CAPITAL PTY LTD
13,673,556
2.96
7
MR PETER ROSS SULLIVAN
10,832,520
2.35
8
TWO TOPS PTY LTD
10,390,539
2.25
9
AUSTRALIAN EXECUTOR TRUSTEES LIMITED <NO 1 ACCOUNT>
10,196,540
2.21
10
MANDALUP INVESTMENTS PTY LTD <MANDALUP SUPER FUND A/C>
10,180,060
2.21
11
MMP (WA) PTY LTD <GEOMETT S/F A/C>
7,210,690
1.56
12
PROTAX NOMINEES PTY LTD <RICHARDS SUPER FUND A/C>
7,036,532
1.52
13
MD NICHOLAEFF PTY LTD <M & N SUPER FUND A/C>
6,278,841
1.36
14
SULLIVANS GARAGE PTY LTD
5,388,332
1.17
15
HARDROCK CAPITAL PTY LTD <CGLW (NO2) SUPER FUND A/C>
5,374,132
1.16
16
ZETA RESOURCES LIMITED
5,160,931
1.12
17
JAMES NOEL SULLIVAN
4,288,174
0.93
18
MR DOUGLAS STUART BUTCHER
4,267,311
0.92
19
ECLECTIC INVESTMENT COMPANY LIMITED
3,604,657
0.78
20
TUNZA HOLDINGS PTY LTD
3,603,121
0.78
345,888,183
77.93
For personal use only
1
Number of
Ordinary
Fully Paid
Shares Held
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the Australian
Securities Exchange Limited. The ASX code is GME.
Page 64 - GME Resources Ltd - Annual Report 2014
For personal use only
For personal use only